sss^5^m>.^^;yy;r:iv    , 


PROTE  CTION 


VERSUS 


FKEE      TRADE 


THE   SCIENTIFIC   VALIDITY  AND  ECONOMIC 

OPERATION   OF  DEFENSIVE   DUTIES 

IN  TRE  UNITED  STATES. 


BY 

HENRY    M.    HOYT. 


NEW  YORK: 
D,    APPLETON    AND    COMPANY, 

1,  3,  AND  5  BOND   STKEET. 
188  6, 


COPTRIGHT,  1SS5, 

By  D.  APPLETON  AND  COMPANY. 


HP 


PEEFACE. 


The  following  pages  are  tlie  result  of  a  friendly  chal- 
lenge to  me  by  an  eminent  Professor  of  Political  Economy 
in  a  Kew  England  college  to  investigate  that  science,  espe- 
cially its  teaching  in  relation  to  protective  tariffs.  The 
challenge  was  accompanied  by  the  confident  prediction : 
"If  you  pursue  it  to  any  length,  you  will  certainly  come 
to  throw  overboard,  with  scorn,  the  Pennsylvania  notion 
that  the  way  to  grow  rich  is  to  stop,  by  law,  profitable 
production "  ;  together  with  the  Professor's  f onnulated 
conclusion  :  "  Protection,  poisonous  in  every  root  and  fiber, 
droops  and  dies  the  moment  the  light  of  common  sense 
and  rational  inquiry  falls  upon  it." 

Layman  though  I  was,  I  could  not  well  refuse  to  take 
up  the  gauntlet  thus  thrown  down  by  the  Professor. 

In  the  intervals  of  business  engagements  I  have  under- 
taken the  investigation.  It  has  been  done  with  reasonable 
thoroughness,  and,  so  far  as  I  know,  with  impartiality  and 
freedom  from  desire  of  controversy.  If  it  betrays  a  con- 
troversial spirit,  it  is  because  it  is  provoked ;  and  even  that 
may  add  something  of  interest  to  a  discussion  otherwise 
rather  dry  and  abstract.  What  "common  sense"  and 
faculty  of  "  rational  inquiry  "  I  possessed  have  been  fairly 
given  to  the  work.  It  could  not  be  denied  that  I  started 
with  a  certain  prejudgment  in  favor   of   the   protective 


iv  PREFACE. 

gcheme.  Tliat,  liowever,  was  no  otlier  tlian  tlie  general 
conviction,  expressed  by  Dr.  William  Rosclier,  tlie  distin- 
guished Professor  of  Political  Economy  at  the  University 
of  Leipsic,  that  "  the  person  who  has  only  a  modest  opinion 
of  the  power  of  his  own  reason,  and  therefore  a  just  one 
of  the  reason  of  other  men  and  other  times,  will  not  believe 
that  a  system  like  the  industrial  protective  system,  which 
the  greatest  theorizers  and  practitioners  favored  for  cent- 
uries, and  which  governed  all  highly  developed  countries 
in  certain  periods  of  their  national  life,  proceeded  entirely 
from  error  and  deception."  Kor,  again,  did  I  believe  that, 
in  a  nation  with  the  quick  and  trained  commercial  mstincts 
of  the  Americans,  such  a  system  could  be  founded  in  mere 
greed,  jobbery,  and  congressional  log-rolhng.  If  the  prac- 
tice had  been  found  expedient,  some  reasons  could  be  found 
justifying  it. 

The  inquiries,  then,  necessarily  led  to  a  study  of  the 
play  and  interaction  of  the  economic  forces,  as  ordinarily 
expounded  in  the  formal  treatises  on  political  economy. 
I  found,  in  detail  and  specifically,  what  I  had  only  felt 
before  in  a  general  way,  that  the  whole  underground  of 
that  science  had  been  wrongly  chosen,  and  that  the  whole 
superstructure  was  now  being  taken  down  by  the  younger 
school  of  economists,  both  in  Europe  and  the  United 
States.  I  have  deemed  it  proper  to  submit,  at  some  length, 
the  destructive  criticism  to  which  the  current  official  politi- 
cal economy  has  been  subjected. 

Of  all  the  forces  and  their  combinations,  as  usually 
treated,  I  find  only  four  pertinent  to  the  discussion  pro- 
posed : 

First.  The  object  of  all  our  efforts  is  "  the  satisfaction 
of  our  desires."  This  will  be  found  to  be  a  more  manage- 
able motive  than  "  wealth  "  for  the  labor  and  abstinence  of 
men  gathered  together  in  society. 


PREFACE.  V 

Second.  "  Commodities  are  paid  for  with  commodities." 
In  international  commerce,  imjDorts  must  be  paid  for  with 
exports — in  the  long  run,  imjDorts  must  balance  exports. 

Third.  While  "  division  of  labor  "  has  been  the  pivot, 
the  fulcrum  on  which  the  industrial  world  has  been  moved, 
and  while  the  special  aptitude  of  each  individual  producer 
furnishes  the  materials  for  domestic  exchange,  and  supe- 
riority, at  some  point,  the  materials  for  international  trade, 
the  law  announced  by  Adam  Smith  is  the  law  of  the  case : 
"  Division  of  labor  is  limited  by  the  extent  of  the  market." 
That  is,  in  other  words,  the  advantages  of  a  "  division  of 
labor "  may  be  lost  by  the  want  of  an  adequate  market  in 
which  the  products  of  the  labor  at  the  point  of  superiority, 
embodied  in  commodities,  may  be  sold. 

Fourth.  In  a  given  area,  as  of  a  nation,  where  the 
owners  of  capital  and  the  owners  of  labor  speak  the  same 
language,  hve  under  the  same  laws,  and  act  under  the  same 
moral,  poHtical,  social,  and  economic  motives,  thus  render- 
ing labor  and  capital  therein  substantially  mobile,  the  com- 
petition of  capital  with  capital  and  of  labor  with  labor  is 
effective.  Over  such  an  area,  competition  tends  to  equahze 
the  recompense  of  all  the  capitals  and  the  rewards  of  all 
labor.     A  monopoly  in  such  a  nation  is  impossible. 

The  inquiry,  also,  involved  an  analysis  of  the  nature 
and  number  of  the  desires  for  which  a  given  people  seek 
satisfaction,  and  the  means  of  satisfying  them.  It  proved 
not  at  all  impossible  to  deal  with  the  aggregate  desires  of 
a  nation  as  a  unit,  and  to  treat  the  problem  as  if  it  was  the 
case  of  an  individual. 

Suppose  an  individual,  an  average  American  farmer, 
with  a  number  of  workmen,  all  of  high  skill,  energy,  and 
industry,  in  possession  of  certain  fertile  fields,  with  stores 
of  building-material,  stones,  timber,  fuel,  and  certain  ma- 
chinery, out  of  which,  by  his  labor,  he  could  supply  a  large 


vi  PREFACE. 

proportion  of  liis  and  their  wants  directly  by  production, 
and  the  remaining  portion  of  their  wants,  indirectly,  by 
exchanging  the  surplus  of  their  natural  products.  Let 
him  be  sm-rounded,  at  a  greater  or  less  distance,  by  neigh- 
bors who  have  fields  hke  his,  only  less  productive,  with 
artisans  who  could  make  his  sleds,  harrows,  harness,  cotton 
and  woolen  goods,  dishes,  and  so  on,  the  product  of  handi- 
craft industries ;  not  with  less  labor,  but  for  lower  money- 
price  ;  and  besides,  stocks  of  merchandise,  consisting  of 
tea,  coffee,  sugar,  tropical  fruits,  drugs,  medicines,  and,  if 
you  please,  wines  and  cigars.  The  farmer  now  works  his 
lands  to  their  capacity,  and  gathers  his  crops  of  wheat,  food, 
cotton,  and  tobacco.  He  already  thus  has,  in  his  garnered 
fruits  and  grains,  something  more  than  half  the  subsistence 
of  himself  and  workmen.  For  the  rest,  he  proposes  to 
exchange  his  surplus — to  trade  the  things  he  does  not  want 
for  the  things  he  does  want.  We  will  suppose  (for  it  will 
subsequently  appear  that  if  anything  is  legitimate  in  the 
science  of  political  economy,  it  is  a  supposition)  the  annual 
value  of  his  crops  to  be  $10,000.  To  feed  his  family  and 
pay  the  cost  of  raising  the  things  he  raises  on  his  fields 
will  cause  him  an  outlay,  say,  of  $6,T00.  This  leaves  him 
$3,300  with  which  to  supply  his  outstanding  want  of 
clothes,  carpets,  nails,  hats,  farming-utensils,  tea,  coffee, 
sugar,  medicines,  fruits,  wine,  and  cigars.  The  inherited 
traits  and  historical  traditions  of  this  farmer  are  such  as  to 
make  all  these  wants  legitimate  ;  they  are  desires  which  he 
is  willing  to  gratify.  Upon  making  the  effort  to  market 
his  surplus  he  finds  he  can  only  sell  $700  worth  ;  his  neigh- 
bors will  only  buy,  because  they  only  want,  $700  worth.  Of 
this  sum  he  spends  half — $350 — for  drugs,  medicines, 
fruits,  wine,  tea,  coffee,  and  sugar,  which  climate  and  other 
reasons  forbid  him  to  produce.  The  other  half — $350 — he 
lays  out  in  certain  commodities  which  he  and  his  workmen 


PREFACE.  Vii 

have  not  as  yet  the  skill  aud  patience  to  undertake  to  pro- 
duce. There  remains  yet  on  his  hands  $2,600  with  which 
he  would,  if  he  could,  buy  his  hats,  coats,  carpets,  shirts, 
dishes,  nails,  etc.,  for  himself  and  his  workmen.  But  there 
is  no  market  to  take  them  o&  his  hands  in  excess  of  $350 
worth,  in  addition  to  the  $350  worth  already  sold ;  nor  did 
his  neighbors  ever  have  a  surplus  of  manufactured  goods 
equal  to  his  demand.  According  to  the  abstract  principles 
of  political  economy,  his  neighbors  on  the  poorer  soils 
ought  to  stop  cultivating  them  to  the  extent  of  the  addi- 
tional $2,600  worth  of  his  products,  and  turn  their  sldll 
and  energy  to  the  production  of  the  hats,  coats,  etc.,  that 
he  wants  to  buy  with  that  surplus.  But,  in  point  of  fact, 
the  farmer  finds  that  they  do  not  do  so  ;  that  they  do,  under 
natural  causes  and  inherited  traits,  still  till  their  native 
soils  to  within  a  narrow  margin  of  their  fertility.  Besides, 
laborers  move  freely  to  the  farm  from  the  neighborhood, 
still  further  disturbing  the  commercial  equilibrium  between 
the  two  communities  ;  but  this  only  made  the  farmer  less 
dependent  on  his  neighbors  to  make  things  for  him,  for 
now  the  migration  of  the  workmen  themselves  takes  the 
place  of  a  trade  in  the  products  of  their  labor. 

Therefore,  finding  upon  examination  that  he  can  make 
all  these  things  on  the  farm,  and  with  as  small  an  expenditure 
of  labor  and  skill  (both  of  which  he  has)  as  his  neighbors, 
he  proceeds  to  make  them.  Why  ?  Because  he  found  no 
other  way  to  satisfy  all  his  desires.  Although  up  to  $700 
worth  he  could  buy  them  abroad  and  cheaper,  beyond  that 
amount  he  must  make  them  himself  or  go  without  them, 
for  he  can  not  hinj  them  at  all,  for  the  reason  that  he  does 
not  bring  acceptable  pnrchase-money  in  his  hands.  Rather 
than  go  without  them,  he  proceeds  to  make  them  on  the 
best  conditions  attainable  under  his  natural  and  acquired 
resources.     The  desires  are  natural  to  him,  and  the  manu- 


viii  PREFACE. 

facture  is  natural  to  liim.  The  manufacture  of  the  $2,600 
worth  is  natural,  but  it  is  more,  it  is  necessary,  and  is  an 
indispensable  part  of  his  supply.  Its  naturalness  does  not 
depend  on  the  price  his  neighbors  charge,  nor  their  willing- 
ness to  accept  the  commodities  he  offers  in  exchange,  but 
upon  the  actual  amount  of  labor  it  costs  him  to  produce 
them. 

If  this  had  been  merely  an  industrial  group,  formed  on 
strictly  commercial  principles,  there  would  have  been  no 
more  workers  in  it  than  were  necessary  to  produce  the  $700 
surplus.  But  this  society  happened  to  be  formed  of  men 
fleeing  from  the  hardness  and  oppressions  of  life  elsewhere, 
and  who  were  not  moving  on  economic  motives  alone.  It 
was  composed  of  picked  men,  of  the  highest  type,  brooking 
no  masters,  having  the  common  bonds  of  kindred,  lan- 
guage, habits,  laws,  love  of  religious  liberty,  and  self-gov- 
ernment— all  of  which  our  benignant  farmer  permitted 
them  to  enjoy  in  the  fullest  degree.  The  group  made  by 
these  social,  moral,  and  political  considerations  determined 
the  size  of  the  industrial  group.  The  political  entity  be- 
came the  industrial  entity.  This  made  them  sufliciently 
numerous  to  disturb  their  commercial  equilibrimn  with 
their  neighbors,  and  consequently  the  $2,600  surplus  lay 
useless  in  their  hands.  When  they  found  that  their  labor 
in  factories,  furnaces,  and  machine-shops,  on  looms  and 
potter's  wheels,  was  as  productive  as  that  on  fertile  fields, 
the  surplus  food  recovered  its  utility  and  exchange  value, 
as  subsistence  for  the  laborers  whom  aH  these  inducements 
had  drawn  together.  The  farmer  now  proceeds  to  "or- 
ganize the  industries"  of  that  political  entity;  especially, 
as  he  has  never  experienced  any  lack  of  capital  in  any  en- 
terprise which  promised  adequate  returns. 

This  farmer,  in  this  determination,  has  simply  accepted 
the  limitations  imposed  on  his  external  exchanges.     His 


PREFACE, 


IX 


mental  resolution,  thus  forced  on  Lira,  not  to  try  to  luy^ 
but  to  raalce^  has  imposed  a  }woliiVitor]f  tariff  upon  all 
that  portion  of  his  necessary  supply  which  lie  does  make. 
He  has  now,  in  the  language  of  the  economist,  imposed  re- 
strictions on  his  exchanges ;  that  is,  he  does  restrict  the 
exchanges  with  his  neiglibors,  but,  to  a  greater  extent,  he 
enlarges  the  exchanges  which  take  place  on  his  own  farm. 
He  has  got  himself  in  a  place  where,  in  the  language  of 
the  free-trade  writer,  he  collects  taxes  of  himself.  It  is 
not  taxation^  it  is  simply  the  cost  of  the  increased  comfort 
which  follows  upon  the  increased  consumption  he  is  now 
enabled  to  indulge.  If  it  be  taxation  it  is  voluntary,  inas- 
much as  it  is  undergone  for  the  sake  of  the  satisfaction  of 
his  desires.  He  can  stop  the  taxation  if  he  will  lessen  his 
satisfactions.  Abundance  and  cheapness  have  been  equal- 
ized upon  the  lowest  and  only  terms  open  to  him.  He 
has,  however,  subserved  his  true  economic  purposes,  and 
has  realized  the  true  end  of  all  his  efforts.  The  ratio  be- 
tween effort  and  enjoyment  has,  in  his  case,  been  reduced 
to  a  minimum.  He  was  reduced  to  the  alternative  of 
wanting  fewer  things,  or  making  them,  on  his  farm,  for 
himself.  Being  a  civilized  man,  he  chose  the  latter ;  being 
a  vertebrate,  he  could  not  do  business  on  the  basis  of  being 
a  hermit-crab. 

But,  inasmuch  as  the  constant  pressure  of  the  neighbors 
to  sell  the  paltry  amount  of  $350  (which  he  could  really 
better  do  without,  but  which  some  of  his  people  insisted 
on  having)  introduces  confusion  and  friction  between  his 
own  producers  and  consumers,  stops  his  mills,  makes  his 
workmen  stand  idle,  and  prevents  him  and  them  getting 
what  they  want,  he  imposes  an  hnport  duty  on  these 
goods,  sufficient  to  equalize  their  cost  with  that  of  his  home 
product ;  and  the  sum  thus  received  goes  into  his  treasury, 
for  the  common  use  of  himself  and  all  his  laborers.     This 


X  PREFACE. 

farmer,  now,  has  imposed  on  himself  "a  tariff  for  reve- 
nue^'' "  with  incidental  protection^''  or  rather  a  tariff  for 
'protection,  with  incidental  revenue. 

All  this  time  there  were  certain  dogmatic  thinkers 
(very  few  of  them  were  hand-workers)  who  said  they,  per- 
sonally, could  make  better  bargains  away  from  home,  if, 
having  got  into  their  pockets  the  high  wages  which  they 
had  received  for  "  services  "  rendered  to  their  co-workmen, 
they  might  be  allowed  to  spend  it  among  the  neighbors  to 
whom  they  had  rendered  no  services ;  and  urged  their  in- 
alienable right  to  pursue  their  o^\^3  interests,  so  destructive 
to  the  interests  of  the  little  community.  But,  the  farmer 
seeing  that  they,  at  best,  could  only  get  a  part  of  the  $350 
worth  of  imported  manufactures,  and  that  the  rest  of  his 
workmen  must  go  without  the  $2,600  worth  which  they 
might  otherwise  make  and  enjoy,  acting  for  the  society, 
promptly  put  his  foot  down  on  this  line  of  uneconomic 
as  well  as  selfish  conduct. 

I  think  it  will  not  be  questioned  that,  if  a  farmer  found 
himself  in  these  surroundings,  he  could  only  supply  all  bis 
wants,  and  those  of  his  workmen,  in  the  way  supposed ; 
and  that,  by  so  doing,  he  would  not  only  increase  the 
population  and  "  wealth  "  of  the  commimity  on  the  farm, 
but,  thus  "regulating  commerce,"  would  promote  their 
"general  welfare";  and  he  would  do  this  on  the  true 
premises  of  political  economy. 

If  we  find  a  nation  relatively  in  the  l.'ke  condition  and 
environment,  the  principles  of  the  science  of  political 
economy  will  be  equally  applicable  to  it.  This  applica- 
bility will  depend  on  the  closeness  of  the  correspondence 
in  the  facts.  The  analogy  will  be  found  unexpectedly 
complete ;  especially  in  the  fact  that,  in  any  event,  about 
nine  tenths  of  the  manufactures  in  the  "protected"  in- 
dustries must  be  produced  at  home,  under  American  con- 


PREFACE.  xi 

ditions.  What  the  tariff  does — and  all  it  does — is  to  com- 
pel the  foreign  producer  to  spend  as  much  in  getting  into 
the  American  market  for  the  other  tenth  as  the  American 
producer  does. 

Our  question  is,  therefore,  I  conceive,  a  national  ques- 
tion and  not  a  cosmopolitan  one. 

The  operation  of  the  four  principles  indicated  is  seen 
in  the  illustration : 

First.  The  satisfaction  of  the  farmer's  desires;  these, 
in  their  number,  kind,  and  intensity,  will  depend  on  the 
kind  of  man  he  is,  and  wiD  determine  the  kind  of  effort  he 
makes  to  satisfy  them. 

Second.  His  "  imports  must  be  paid  for  with  liis  ex- 
ports " ;  that  is,  by  his  external  trade  he  can  get  nothing 
into  his  territory  except  in  pay  for  what  he  sends  out  of 
his  territory. 

Third.  "  Division  of  labor  is  limited  by  the  extent  of 
the  market "  ;  that  is,  if  he  can  not  sell  the  total  product 
of  his  work,  when  applied  to  his  most  advantageous  indus- 
try, his  labor  will  not  be  as  profitable  as  it  might  otherwise 
be,  and  he  might  as  well  stand  idle  for  a  part  of  the  time. 
What  he  makes  when  he  would  otherwise  be  idle  costs  him 
nothing. 

Fourth.  When  he  turns  his  labor  and  capital  to  his  own 
fields  and  workshops,  under  effective  competition  and  the 
perfect  mobility  of  these  factors  of  production,  no  monop- 
oly can  grow  up  within  his  little  territory. 

When  the  individual  or  the  community  discover  that 
they  need  certain  commodities,  but  can  not  buy  more  value 
than  they  can  sell,  by  reason  of  not  offering  acceptable  pay, 
and,  at  the  same  time,  can  produce  them  ^vith  no  greater 
cost  of  labor  and  abstinence  in  overcoming  the  obstacles 
which  nature  presents  than  other  individuals  or  other  com- 
munities, they  naturally  set  about  making  them  by  the 


xii  PREFACE. 

direct  act  of  production.  In  tlie  case  of  a  nation,  tlie  na- 
tional legislature  provides  for  tlie  domestic  production  and 
exchange,  by  imposing  some  sort  of  restriction  on  the  for- 
eign exchange. 

Possibly,  my  friend  the  Professor  is  not  aware  of  the 
full  contents  of  "  the  Pennsylvania  notion."  ne  seems  to 
think  pig-iron  is  the  only  god  of  that  people.  The  first 
corporate  determination  of  that  State,  at  least,  shows  what 
one  great  Commonwealth,  finding  itself  in  the  predicament 
of  om'  farmer,  did,  and  exactly  the  reasons  for  doing  it.  In 
the  preamble  to  her  tariff  act,  passed  on  the  Wih  day  of 
8e2)temh€i\  1785,  just  one  hundred  years  ago,  it  was  thus 
recited : 

*'Ati  act  to  encourage  and  protect  the  manufactures  of 
this  State,  by  laying  additional  duties  on  the  importation  of 
certain  manufactures  which  interfere  with  them.  Whereas, 
divers  useful  and  beneficial  arts  and  manufactures  have  been 
gradually  introduced  into  Pennsylvania,  and  the  same  have 
at  length  risen  to  a  very  considerable  extent  and  perfection, 
insomuch  that  during  the  late  war  between  the  United  States 
of  America  and  Great  Britain,  when  the  importation  of  Euro- 
pean goods  was  much  interrupted,  and  often  very  difficult 
and  uncertain,  the  artisans  and  mechanics  of  this  State  were 
able  to  supply,  in  the  hours  of  need,  not  only  large  quantities 
of  weapons  and  other  implements,  but  also  ammunition  and 
clothing,  without  which  the  war  could  not  have  been  carried 
on,  whereby  their  oppressed  country  was  greatly  assisted  and 
relieved  :  and,  whereas,  although  the  fabrics  and  manufact- 
ures of  Europe  and  other  foreign  parts,  imported  into  this 
country  in  times  of  peace,  may  be  afforded  at  cheaper  rates 
than  they  can  be  made  here,  yet  good  policy  and  a  regard  to 
the  well-being  of  divers  useful  and  industrious  citizens,  who 
are  employed  in  the  making  of  like  goods  in  this  State,  de- 
mands of  us  that  moderate  duties  be  laid  on  certain  fabrics 


PREFACE. 


xni 


and  manufactures  imported,  which  do  most  interfere  with, 
and  which  (if  no  relief  be  given)  will  undermine  and  destroy 
the  useful  manufactures  of  the  like  kind  in  tliis  country  ;  for 
this  purpose  : 

"  Section  2.  Be  it  enacted,  and  it  is  hereby  enacted,  by 
the  Representatives  of  the  Freemen  of  the  Commonwealth 
of  Pennsylvania,  in  General  Assembly  met,  and  by  the  au- 
thority of  the  same,  that  further  and  additional  duties,  here- 
inafter specified,  shall  be  levied,  collected,  and  paid,  on  the 
importation  into  this  State  of  certain  goods,  wares,  and  mer- 
chandise, enumerated  and  particularized  in  this  act " — and 
the  act  goes  on  to  enumerate  more  than  seventy  articles. 

Herein  will  be  found,  I  think,  a  fair  exposition  of  the 
motives  not  "  to  stop  by  law  profitable  production,"  but 
rather,  by  enlarging  the  domestic  exchanges,  to  substitute 
a  new  form  of  production  in  order  to  provide  for  the  "  sat- 
isfaction of  the  desires  "  of  all  the  people.  "  The  freemen 
of  the  Commonwealth  of  Pennsylvania  "  then  knew  what 
they  wanted,  and  the  most  feasible  and  cheapest  scheme 
for  supplying  their  wants.  They  stood  at  the  beginning 
of  things,  and  saw  them  clearly  enough.  The  "  notion " 
spread  rapidly  through  all  the  States  of  the  confederation ; 
so  much  so,  that  the  purely  commercial  convention,  called 
by  the  late  colonies  in  1786,  resulted  in  the  formation  of 
the  Constitution  of  the  United  States  in  1787.  The  pres- 
ent Constitution  was  undeniably  dictated  by  commercial 
necessity.  Mr.  Webster  said,  in  his  speech  to  the  citizens 
of  Buffalo,  in  June,  1833 :  "  The  protection  of  American 
labor  against  the  injurious  competition  of  foreign  labor,  so 
far,  at  least,  as  respects  general  handicraft  production,  is 
known,  historically,  to  have  been  designed  to  be  obtained 
by  establishing  the  Constitution."  And  Mr.  Choate,  in 
the  Senate,  March,  18-42,  said:  "A  whole  people,  a  whole 
generation  of  our  fathers,  had  in  view,  as  one  groundwork 


xiv  PREFACE. 

and  purpose  of  tlieir  new  government,  the  acquisition  of 
tlie  means  of  restraining  by  governmental  action  the  im- 
portation of  foreign  manufactures  for  the  encouragement 
of  manufactures  and  of  labor  at  home ;  and  desired,  and 
meant  to  do  this,  by  clothing  the  new  government  with 
this  specific  power  of  regxdatlng  commerced 

There  is,  then,  the  jural  power,  under  the  Constitution, 
to  enact  a  prohibitory  tariff  even,  if  economic  principles 
justified  it.  Whether  they  do  or  not,  it  is  the  purpose  of 
the  following  pages  to  determine.  Anyway,  such  a  tariff 
is  not  unconstitutional. 

I  have  not  dealt  in  statistics,  which  are  liable  to  no  end 
of  combinations  and  no  end  of  disputation.  Comparisons 
are  impossible  for  want  of  the  second  term  of  the  compari- 
son, to  wit,  another  people,  like  ours  in  traits  and  j^hysical 
resources,  developed  under  free  trade. 

There  have  been  no  assumptions  made  in  the  argument. 
The  contribution  made  by  American  labor  in  the  commodi- 
ties produced  in  the  protected  industries  is  a  necessary  part 
of  the  full  supply  of  the  whole  demand.  They  are,  there- 
fore, natural  and  necessary. 

On  tlie  other  hand,  the  advocates  of  freedom  of  trade 
proceed  entirely  on  the  assumption  that  foreigners  have 
the  capital,  labor,  and  skill  to  make  a  surplus  of  manu- 
factured commodities  which  will  supply  our  demand,  and 
that  there  is  a  foreign  market  adequate  to  take  the  surplus 
of  all  our  products  made  "  under  freedom,"  and  that  we 
can  exchange  one  surplus  for  the  other,  and  thus  l)uy  the 
satisfaction  of  our  remaining  desires.  I^either  of  these 
assumptions  is  true.  This  is  a  question  of  history  and  fact, 
and  not  of  a  jpriori  hypothesis.  If  the  following  pages 
show  some  repetition — even  to  tediousness — on  this  point, 
it  is  because  it  crops  out  from  whatever  direction  the  sub- 
ject is  explored,  and  it  is  unavoidable.     If  the  main  line 


PREFACE.  XV 

of  the  argument  is  well  chosen,  I  have  no  fears  but  that 
writers  on  economy  will  appear  who  can  use  a  more  rigor- 
ous logic  and  wield  more  facile  pens.  They  will  nialce  the 
necessary  generalizations  in  the  debate,  and  blaze  the  de- 
sirable "  short  cut "  through  the  discussion.  I  have  reached 
very  positive  convictions  of  my  own,  in  the  progress  of  my 
study,  upon  the  scientitic  validity  of  defensive  duties  in 
their  operation  on  industry  in  the  United  States. 

I  am  persuaded  that  a  people  such  as  ours,  acting  under 
physical  conditions  such  as  ours,  were  driven  by  the  very 
nature  of  the  case  to  the  course  of  development  which  we 
took.  At  the  same  time  I  am  not  unmindful  of  the  dan- 
ger in  economic  discussion  alluded  to  by  Mr.  Mill,  "  the 
danger  of  overlooking  something."  If  I  have  incurred 
the  danger,  sharp  criticism  will  detect  and  point  it  out.  I 
am  sure  that  neither  the  writer  nor  any  of  his  fellow-citi- 
zens can  have  any  interest  in  this  great  debate  excej^t  to 
get  at  the  right  and  truth  of  the  matter. 

What  we  are,  the  census  and  the  national  landscape  show 
— what  might  have  heen,  under  free  foreign  trade,  has  never 
been  made  to  appear.  Until  the  economist  of  free  trade 
makes  some  demonstration  in  this  line,  he  must  rest  under 
the  condemnation  which  Dr.  Johnson  has  thus  expressed  : 
"  He  who  will  determine  against  that  which  he  knows,  be- 
cause there  may  be  something  which  he  knows  not,  he  that 
can  set  hypothetical  possibility  against  acknowledged  cer- 
tainty, is  not  to  be  admitted  among  reasonable  beings." 

It  is  evident  enough  from  numerous  extracts,  intended 
to  be  duly  credited,  that  I  have  borrowed  freely  from  the 
writings  of  many  authors ;  but  I  should  fail  to  pay  a  posi- 
tive and  distinct  debt,  if  I  omitted  acknowledgment  of  my 
obligations  to  the  late  George  Basil  Dixwell,  of  Boston. 

II.  M.  H. 

Wilkes-Bakre,  Pa.,  December^  1SS5. 


TABLE  OF  C0:N^TE]N'TS. 


CHAPTEPw  I. 


PAGR 

Peeliminakt — Some  Definitions 1 

The  question  of  protection  and  free  trade  still  awaits  a  practical 
settlement — A  question  partly  of  science  and  partly  of  ai-t — The  un- 
satisfactory state  of  the  science  of  political  economy — Many  ques- 
tions still  unsettled — Colonel  Torrens — Prof.  Perry's  disappoint- 
ment— Definitions  of  the  science  of  political  economy — Sir  James 
Steuart — Adam  Smith — J.  B.  Say — Mr.  McCulloch — M.  Sismondi — 
M.  Storch— Prof.  Senior — Mr.  Mill— Prof.  Roscher— M.  Bastiat— 
Henry  C,  Carey — Prof.  Francis  A.  Walker — Prof.  Sidgwick — Prof. 
Bowen — Prof.  Perry — Prof.  Cairncs — M.  de  Laveleye. 

CHAPTER   II. 

Science  of  Political  Economy — The  Mechanism  of  Produc- 
tion   13 

The  method  of  the  developmeat  of  the  science — The  instruments 
of  production,  labor,  capital,  land — Supply  and  demand,  competi- 
tion— Labor,  its  definitions — Capital,  its  definitions — Rent,  its  defini- 
tions— The  division  of  labor,  theory  of  free  trade  based  on  it — Its 
limitations — The  distinction  between  utility  and  value — Societary 
association — Credit — Money  the  instrument  of  association — Mal- 
thus's  theory  of  population — The  wages-fund  theory. 

CHAPTER  III. 

The  Motive-Power  of  Production — The  Economic  Man        .     34 

Mr.  Mill's  abstraction — Prof.   Senior's  four  propositions — Prof. 

Sidgwiek's  view — Satisfaction  of  desires   the  real  pursuit — Prof. 

Perry — Henry  C.  Carey — Prof.  Walker — M.   Bastiat — Which   the 


XVIU 


TABLE   OF   CONTENTS. 


cheapest  and  which  the  dearest  market — ^Prof.  Perry's  inadequate 
premises — He  omits  consumption,  a  vital  consideration — Prof.  Jev- 
ons — The  real  man — Walter  Bagehot — Prof.  Leslie— Mr.  Ruskin. 

CHAPTER   IV. 

Who  is   bound   by  toe  Science — Its    Jurisdiction  oyer  the 
Legislator 60 

Mr.  McCulloch— Prof.  Senior— Mr.  Mill— Prof.  Jevons— Walter 
Bagehot — Prof.  Leslie — Frederic  Harrison — Dr.  John  K.  Ingram— 
Stephen  Colwell— Prof.  Rickards — Prof.  Sumner — Destructive  criti- 
cism on  the  science  in  its  present  state — Deductive  science  power- 
less without  observation  and  experience — No  laws  of  political  econo- 
my of  universal  application — The  opinion  of  Napoleon — '^l.  Thiers 
— Thomas  Carlyle— Table  of  contents  of  Adam  Smith's  "  Wealth  of 
Nations." 

CHAPTER   V, 

Laissez  faire — Not  a  Scientific  Dogma 88 

Adam  Smith's  doctrine  of  natural  liberty — The  basis  of  his  theory 
of  free  trade — He  reduces  political  economy  to  a  theory  of  egoism — 
Prof.  Cairnes's  criticism  on  him — Origin  of  laissez  faire — M.  Col- 
bert's achievements — M.  Wolowski  on  the  role  of  authority — ^Prof. 
Perry's  concession — M.  Bastiat,  mere  liberty  powerless  —  Laissez 
faire  a  fiction  of  ancient  philosophy — Prof.  Cairnes  says  it  is  a  pre- 
tentious sophistry — Rejected  by  Prof.  Jevons  and  Prof.  Walker — 
Individual  and  national  interests  are  not  identical,  demonstration  by 
John  Rae — Mr.  Mill's  concession  to  protection — Protest  by  Prof. 
Bonamy  Price  and  Prof.  Thorold-Rogers — Mr.  Mill  reaffirms — 
Judge  Phillips — Laissez  faire  discredited  as  a  scientific  dogma. 

CHAPTER  VI. 

The  Real  Question — Not  one  of  Taxation — Intolyes  the 
Economic  Effects  of  Restriction  .  .  .  .  .112 
Misstatement  of  the  issue  by  Profs.  Perry  and  Sumner — Distinc- 
tion between  taxation  and  the  regulation  of  commerce — The  four 
legitimate  issues  as  raised  by  Prof.  Sumner — What  his  abstract 
system  overlooks — Prof.  Perry's  exclusions — Analysis  of  foreign 
trade — Prof.  Perry's  six  questions  and  their  answers — Prof.  Perry's 
impregnable  position — Its  weakness. 


TABLE  OF  CONTENTS.  xix 

CHAPTER   VII. 

PAGE 

The   Alteuxatives   offered — "What   we  Buy    and  wnAT  we 

Sell 131 

Two  sots  of  alternatives  offered  by  the  free-trader — The  first  set 
necessarily  rejected — The  second  set  the  nation  undertook  to  accept 
— The  assumptions  on  which  they  were  based  turned  out  to  be 
wron^ — First,  that  there  is  a  market  abroad  for  the  surplus  of  pro- 
ductions in  the  most  advantageous  industries — Disproved  by  Benja- 
min Franklin,  Alexander  Hamilton,  James  Madison,  John  C.  Cal- 
houn, Andrew  Jackson,  Daniel  Webster — Failure  of  Prof.  Perry's 
equation  of  international  demand — Unprofitable  industries — What 
we  sell  and  what  wc  buy — The  balances  of  trade  on  the  exports  to 
and  imports  from  the  other  nations. 

CHAPTER  VHI. 
Adam  Smith — Some  Facts  ijj  oue  History  .  .  .  .165 
The  second  assumption  of  the  free-trader — That  the  exchange- 
able value  of  our  exports  would  not  be  reduced,  and  that  the  ex- 
changeable value  of  our  imports  would  not  be  increased — The  prob- 
lem submitted  to  Adam  Smith — Discussion  of  it  on  the  principles 
of  the  "  Wealth  of  Nations  " — The  satisfaction  of  the  desires  of  all 
the  people  by  exchanges  in  a  foreign  market  impossible,  for  two 
reasons :  the  foreign  market  does  not  contain  the  sui'plus  we  wish 
to  buy,  nor  will  it  take  the  surplus  we  wish  to  sell — Wc  are  thrown 
back  on  the  domestic  manufacture — The  facts  in  our  early  history 
— Growth  of  domestic  industries  during  the  Napoleonic  wars — The 
English  blockade,  the  Berlin  Decree,  Orders  in  Council,  the  Milan 
Decree,  all  operated  as  restrictions — Jefferson  Davis  on  the  com- 
pensating effects  of  restriction  in  the  Confederacy  —  Effect  of 
restrictions  from  1S07  to  1816  on  the  cotton,  woolen,  and  iron  in- 
dustries— Prof.  Taussig's  concession  to  the  economic  effect  of  re- 
strictions. 

CHAPTER  IX. 
The  Economic  Question — The  Scientific  Question  .  .  189 
The  two  ideals  of  the  end  we  desire  to  reach — The  problem  as 
proposed  by  Prof.  Jevons  realizes  all  the  satisfactions  which  our 
labor  and  capital  can  accomplish — Reached  by  restrictions — The 
problem  as  proposed  by  Prof.  Sumner,  the  maximum  of  material 
good  for  a  given  effort — Will  realize  the  satisfaction  of  the  desires 


2x  TABLE   OF   CONTEXTS. 

PAGE 

of  only  some  of  us — The  exertions  of  all  of  us  can  not  realize  in  the 
foreign  market  the  satisfaction  of  the  desires  of  all  of  us — Supplj'- 
ing  the  demand  of  the  foreign  market  will  not  call  into  activity  all 
our  resources  and  all  our  energies — Some  exchanges  in  the  foreign 
market  advantageous — All  exchanges  not  advantageous — Compet- 
ing industries — The  fatal  results  of  overproduction  of  food  and  raw 
materials  —  The  impossibility  of  purchasing  twenty-six  hundred 
million  dollars'  worth  of  imports  with  seven  hundred  million  dol- 
lars' worth  of  exports — We  fail  in  the  satisfaction  of  our  desires 
— The  railroad  trip  between  New  York,  Philadelphia,  and  Trenton. 

CHAPTER  X. 
The  Political  Question — Tue  Popular  Question  .  ,  213 
The  supposition  that  we  were  the  only  nation  on  the  planet — In 
what  respect  the  introduction  of  the  elements  of  other  nations 
should  affect  us — The  distinction  between  an  organism  as  a  whole 
and  the  units  composing  it — What  is  called  the  liberty  of  the  unit 
is  necessarily  absorbed  to  a  greater  or  less  extent  by  that  of  the 
whole — Protection  in  the  United  States  arose  out  of  the  facts  of 
our  early  history — Some  of  these  facts  set  forth  in  detail — The 
relations  between  agriculture,  manufactures,  and  commerce — The 
aggregate  of  the  desires  of  the  people  of  the  United  States — Their 
satisfactions  can  not  be  purchased  in  a  foreign  market — Satisfac- 
tions must  be  made  at  home — The  price  of  them  is  the  cost  of  liv- 
ing, and  not  taxation. 

CHAPTER   XI. 

Schedule  "  A "— Peodtjctiox  rxDEE  Feeedom  .  .  .  240 
Mr.  Springer's  schedule  of  incidental  taxation — Intended  to  show 
the  taxation  which  protection  imposes  on  consumers  — Hon.  Frank 
Hurd's  assumption — The  industrial  organization  out  of  which  the 
farmer,  the  laborer,  and  the  professor  get  their  compensation — It 
must  come  from  the  exchange  of  services  between  them — Exports 
must  pay  for  the  imports — Free-traders  victims  of  the  fallacy  of 
division — Why  the  atomistic  view  of  society  fails — The  individual 
peddler — The  Minnesota  farmer — Prof.  Sumner's  iron  problem — 
We  must  fall  back  on  the  domestic  production — That  must  be  put 
beyond  the  reach  of  contingency — Why  destroyed  industries  can  not 
spring  up  again — Capital  and  labor  not  reservoirs  of  pure  force,  to 
be  turned  on  and  off  at  pleasure — America  as  a  manufacturing  com- 


TABLE   OF   CONTEXTS.  xxi 

PAGB 

petitor — The  law  of  indifference — The  conditions  on  which  free 
trade  is  possible — Prof.  Cairnes  and  Mr.  Mill's  accounts  of  its  opera- 
tions on  us — Mr.  Carey's  account  of  the  necessary  sequence  of  adopt- 
ing it. 

CHAPTER  xir. 

C03T   OF    PlJODUCTIOX — A   PaUADOX 277 

Attempt  of  free-traders  to  solve  the  question  on,  consideration 
of  cost  of  production — Our  high  wages  a  detriment  to  competition 
— David  A.  Wells  —  Sir  Thomas  Brassey  —  Prof.  Cairnes  —  Prof. 
Cuirnes's  paradox,  that  a  high  rate  of  wages  means  a  low  cost  of 
production — What  it  proves — Lands  us  back  into  the  group  of  agri- 
cultural industries — Prof.  Perry's  inventory  of  our  resources — Why 
we  have  failed  to  enter  into  their  possession  under  free  trade — The 
"  something  else  "  we  can  do  if  we  abandon  the  protected  industries 
— English  free-traders  invite  us  to  go  into  the  general  business  of 
civilization  for  the  benefit  of  the  whole  family  of  mankind — Our 
present  mission  rather  to  make  commodities  cheap  and  abundant 
for  ourselves. 

CHxiPTER  XIIT. 
A  Cass  ix  Point — The  Australian  Episode  ....  302 
Gold  in  Australia  and  California — The  cases  of  these  countries 
illustrate  how  advantageous  industries  and  cost  of  production  oper- 
ate in  international  commerce — The  advantage  of  the  industry  de- 
pends on  the  command  which  its  product  has  over  the  markets  of 
the  world — Food  and  gold — The  relative  efficiency  of  food  and  gold 
in  making  foreign  exchanges — The  decline  in  the  productiveness  of 
her  mines  resulted  in  the  social,  political,  and  pecuniary  progress 
of  Australia — Industrial  growth  not  measured  by  extent  of  external 
trade — In  the  United  States,  what  are  called  the  advantageous  in- 
dustries, food  and  raw  materials,  never  procured  in  foreign  markets 
the  other  commodities  we  needed — A  dernier  ressort  to  domestic 
manufacture  under  protection. 

CHAPTER  XIV. 
Competition  in  a  Foreign  Market  compels  its  to  export  our 
Gratuities 311 

Our  so-called  advantages  He  in  our  natural  resources — Interna- 
tional commerce  sets  competition  in  operation — It  gives  us  pay  only 
for  our  onerous  contribution  to  value — We  export  the  gratuities  for 


xxii  TABLE   OF  COXTEXTS. 

PAGE 

nothing — Rigid  demonstration  of  this  proposition  by  M.  Bastiat — 
Cheap  foreign  labor  not  a  gratuity  to  us — Bankruptcy  and  fire- 
damaged  goods  not  a  reliable  source  of  supply — Our  warfare  is 
against  nature  and  not  against  humanity  elsewhere — The  high-priced 
human  instrument  of  production — Free  trade  enables  Prof.  Bonamy 
Price  and  Prof.  Thorold-Rogers  to  call  our  Western  prairie  lands 
English  farms — Mr.  Carey's  maxim,  whoever  is  compelled  to  seek 
a  market  must  pay  the  cost  of  getting  to  it. 

CHAPTER   XV. 

General   Theory  of  Wages— High  Rate   of  Wages   in  the 
TJnited  States         .........  324 

There  is  no  general  formula  which  can  settle  the  exchange  rela- 
tions of  capital,  labor,  and  commodities — Supply  and  demand  no 
solution — Commodities  and  laborers  not  produced  upon  the  same 
motive — High  wages  here  not  based  on  exchange  value  of  agricult- 
ural products — The  theories  of  Profs.  Perry,  Sumner,  and  Walker 
examined — Competition  of  the  farm  with  the  shop — Independent 
proof  that  the  protective  tariff  does  not  permit  one  citizen  to  col- 
lect taxes  of  another — High  rate  of  wages  in  the  United  States 
based  on  the  energetic  character  of  people  using  highly  productive 
instruments  in  field,  forest,  seas,  and  mines — Engaged  principally 
in  making  commodities  to  be  consumed  by  the  laborer  himself — 
The  case  as  put  by  George  Basil  Dixwell  and  Prof.  Sumner. 

CHAPTER   XVI. 

Why  Indudteial  Entities  should  coeeespond  "with  Political 

Entities 361 

The  question  only  applicable  to  a  group  of  freely  trading  nations — 
Xo  such  group  on  the  eai'th  as  yet — To  form  such  a  group  would  lead 
to  a  redistribution  of  the  capital  and  labor  of  the  nations  forming  it 
— The  group  as  a  whole  might  gain,  any  member  of  it  may  lose — 
The  cases  in  Germany  and  France — Free  trading  in  France,  Holland, 
Belgium,  and  Austria  under  Napoleon — The  case  of  the  thirty-eight 
States  of  the  Union — The  industrial  entity  not  determined  by  eco- 
nomic motives — The  reasons  for  maintaining  the  political  entity  are 
social  and  political — The  economic  results  flow  from  them  and  are 
subsidiary — The  conditions  on  which  universal  free  trade  can  be 
realized. 


TABLE   OF  CONTENTS.  xxiii 


CHAPTER    XVII. 

PAGE 

A  Fallacy  which  Feee-Trade?{3  put  ix  thk  Mouths  of  Pko- 

TECTIOKISTS — CHEATING   InDUSTKV 378 

The  professors  ask,  Can  taxes  make  capital  out  of  nothing  ? — Re- 
strictions do  not  create  productive  energy — They  permit  a  different 
distribution  of  existing  energy — They  awaken  slumbering  energies 
— The  English  Navigation  Act — Adam  Smith  calls  it  "  that  great  pro- 
hibitive and  protective  law,  the  wisest  of  all  English  commercial 
regulations  " — What  it  did  for  English  supremacy  in  trade — The  fal- 
lacy of  the  syllogism  of  Mr.  Mill — A  question  of  fact,  answered  by 
Mr.  Dixwell. 

CHAPTER  XVIII. 

Industrial  Results   achieved — Some  Practical  ATaxims   of 
Tariff  Reform 391 

The  true  grounds  of  our  argument — How  our  landscape  would 
have  looked  under  free  trade — The  assault  by  American  capital  and 
labor  on  nature — Its  grand  results  in  increasing  utilities  and  dimin- 
ishing values — Leisure  not  possible  to  men  of  our  race — Cheapened 
American  products — Our  contribution  to  the  world's  civilization — 
Has  raised  the  morale  of  labor  everywhere — The  free-trader's  pro- 
posals to  export  food,  raw  materials,  and  manufactured  goods — 
An  impossible  proposal :  it  leaves  nothing  for  other  nations  to  do  for 
us — Exports  and  imports  no  criterion  of  real  growth — We  are  about 
to  assert  our  supremacy  on  the  ocean — Mr.  Gladstone's  Godspeed 
to  us — Tariff  reform,  removing  protective  duties  according  to  sci- 
ence— Horizontal  reductions — The  distinction  between  duties  for 
revenue  and  protection — What  consumers  have  a  right  to — The  in- 
cidence of  customs  duties  deduced  from  experience — The  practical 
maxim  for  the  future. 


PROTECTION   VS.  FREE  TRADE. 


CHAPTEE  I. 

PEELmrXAKY SOME    DEFINITIONS, 

It  is  a  hundred  years  since  Adam  Smith  published  the 
"  Wealth  of  Nations."  After  a  century  of  theoretical  dis- 
cussion, the  question  of  "  free  trade  "  and  "  protection  "  still 
awaits  a  practical  settlement.  Scholars  have  ■written  es- 
says, professors  have  written  books,  and  statesmen  have 
filled  volumes  of  debates,  without  producing  any  settled 
reasons  for  their  convictions  on  the  subject  in  the  minds  of 
the  majority  of  the  people  in  any  country.  To-day  it  is  an 
absorbing  topic  in  America,  and  administrations  and  poli- 
cies will  be  determined  by  the  decision  of  the  voters  of  the 
United  States  upon  economic  consequences  involved  in  it. 
One  great  school  of  political  economy  conceive  that  they 
have  established  a  series  of  propositions  compelling  belief 
in  the  doctrine  of  free  trade,  to  which  every  intelligent 
mind  must  assent — asserting  with  more  vigor  than  courtesy 
that,  if  a  man  has  not  yet  made  up  his  mind  on  this  subject, 
it  is  because  "  he  has  no  mind  to  make  up."  By  virtue  of 
much  iteration  they  have  persuaded  themselves,  and  seem 
to  have  induced  a  wide-spread  conviction  in  the  pubHc 
mind,  that  somewhere  and  somehow  in  the  science  of  Po- 
litical Economy  ai'e  imbedded  principles  which  establish 
2 


2  PROTECTION    VS.   FREE   TRADE. 

this  theory  ;  that  there  are  definite  data  in  that  science  from 
wliich  their  conclusions  inevitably  flow ;  that  there  are  cer- 
tain scientific  postulates  from  which  can  be  unalterably  de- 
duced the  economic  policy  of  free  trade.  They  assert  that 
tliis  science  "  belongs  to  no  nation  and  is  of  no  country." 
If  such  be  the  case — if  the  theory  is  a  universal  one  and 
true ;  if  science  terminates  in  the  theory — that  should  be 
the  end  of  discussion.  If  the  theory  be  true,  the  practice 
of  it  in  accordance  will  be  right.  If  it  be  demonstrable 
that  free  trade  leads  to  the  greatest  economic  gains  for  the 
people  of  the  United  States,  then  the  statesman  of  the 
United  States  must  practice  in  the  art  of  political  economy 
that  which  the  philosopher  teaches  in  the  science  of  polit- 
ical economy.  If  there  be  any  irrepealable  laws  of  human 
nature,  operating  in  the  domain  of  this  science,  of  uni- 
versal application — appropriate  to  all  people,  at  all  times 
and  under  all  circumstances — then  we  ought  to  know  what 
they  are  and  submit  to  this  constitution  of  things.  If  there 
be  no  sach  general  laws,  we  ought  to  know  that.  In  that 
event  we  are  remanded  to  the  study  of  the  fads  in  our 
situation  as  a  nation,  and  shall  be  at  liberty  to  adopt  that 
policy  which  a  fair  rational  judgment  upon  our  own  case 
shall  dictate.  The  mere  political  economist  is  in  the 
habit  of  laying  down  the  conclusions  of  his  science — its 
theoretical  deductions — and  then,  when  brought  face  to 
face  with  a  practical  question  upon  Avhich  action  must  be 
taken,  he  abdicates  in  favor  of  the  "statesman."  The 
modern  economist  has  found  it  necessary  to  work  out  his 
problem  as  if  wealth  were  an  end  in  itself,  leaving  states- 
men to  take  up  his  results  and  place  them  in  their  due 
relation  to  the  wider  purposes  and  aims  of  society.  He 
deliberately  forgets  or  suppresses  the  fact  that  society  has 
other  pui'poses  and  aims.  He  is  uncertain  whether  his  ab- 
stractions will  find  any  corresponding  reaHty  in  men  and 


rRELIMINARY— SOME   DEFINITIONS.  3 

things.  As  an  expert,  lie  carries  on  all  his  processes  in  the 
assumption  that  he  is  operating  in  a  vacuiun,  but  as  a  lay- 
man he  finds  that  the  medium — human  society — with 
which  he  is  dealing  is  not  a  vacuum,  but,  on  the  contrary-, 
is  filled  with  resistance  and  obstructions,  and  his  science 
avails  nothing  for  conduct. 

The  pretensions  of  this  school  of  economists  whose 
logical  outcome  is  free  trade  are  entitled  to  examination. 
Most  writers  in  England  since  the  days  of  Adam  Smith, 
and  many  in  the  United  States,  have  insisted  that  the 
result  of  sound  discussion  in  political  economy  leads  to  the 
doctrine  of  freedom  of  trade  between  all  nations ;  and  that 
irrespective  of  the  fact  that  all  nations  do  not  adopt  it. 
Inasmuch  as  all  sentiment,  all  considerations  of  patriotism, 
of  charity,  of  religion,  of  domestic  ties,  of  honor,  are  by 
the  very  definition  of  political  economy  excluded  from  the 
field  of  the  science  by  this  school  of  economists,  they  must 
mean  that  by  a  system  of  free  trade  the  wealth  of  any 
particular  nation  will  be  in  the  largest  way  promoted  ;  that 
the  necessaries,  conveniences,  and  luxuries  of  its  inhabit- 
ants will  be  supplied  with  less  cost  of  labor  indirectly^  by 
means  of  foreign  trade,  than  directly  by  the  process  of 
production.  Neither  the  economist  nor  the  statesman  can 
be  engaged  in  any  more  vital  inquiry  than  whether  this  is 
indeed  true.  This  inquiry  is  to  be  pursued,  we  are  told, 
in  the  formal  treatises  on  political  economy.  In  that  sci- 
ence, it  is  insisted,  is  a  body  of  reasoned  truth  upon  which 
we  may  take  our  stand  ;  in  it  is  a  coherent  system  of  doc- 
trine which  leads  us  to  actual  verities  accessible  to  all  men 
of  average  comprehension,  equally  available  to  the  jDro- 
fessor  and  the  merchant,  the  farmer  and  the  manufacturer, 
the  student  and  the  statesman.  Surely,  if  there  be  such  a 
system,  the  millions  of  quick,  acute,  and  trained  minds 
engaged  in  the  wonderful  industrial  and  commercial  enter- 


4  PROTECTION    VS.   FREE   TRADE. 

prises  of  our  own  times  must  come  to  some  agreement 
toucliing  first  principles,  and  the  inevitable  consequences 
flowing  from  them  ;  the  student  in  his  closet,  and  the  busi- 
ness-man at  his  desk,  ought  to  agree  as  to  the  truth,  if  there 
is  ascertainable  truth  in  the  case.  Probably  it  must  be 
admitted  that  the  majority  of  men  in  the  various  pursuits, 
even  the  most  intelligent,  have  had  neither  the  time  nor 
opportunity  to  become  familiar  with  the  formulated  propo- 
sitions of  the  professional  writers  on  political  economy. 
That  the  science  has  never  had  very  much  practical  effect 
in  the  conduct  of  men  need  not  be  adverted  to ;  nor,  in- 
deed, that  most  men  have  been  suspicious  of  the  science. 
Nor  has  the  dislike  of  the  science,  as  a  safe  guide  in  affairs, 
ever  been  less  intense  than  to-day.  One  has  only  to  read 
the  able  and  earnest  essays  of  the  best  writers  in  England, 
the  Continent,  and  the  United  States,  to  be  persuaded  of 
the  doubt,  the  unrest,  and  the  distrust  pervading  the  most 
thoughtful  minds  as  to  the  present  condition  and  future 
standing  of  the  science.  As  now  taught,  the  dissatisfaction 
with  its  premises  and  its  conclusions  is  wide-spread  and  in- 
tense. This  dissatisfaction  is  confined  to  no  school,  and  is 
equally  felt  by  and  expressed  by  all — free-trader  as  well 
as  protectionist. 

We  propose  to  make  an  analysis  of  the  teachings  of  the 
science  of  political  economy,  as  touching  the  debate  be- 
tween "  free  trade "  and  "  protection."  If  there  be  any 
"inmost  nature"  in  the  subject,  we  propose,  under  the 
guidance  of  the  economists,  to  explore  it.  We  propose 
briefly  to  inquire  what  this  science  is  about,  where  its 
teachings  begin,  and  where  they  end.  A  careful  and  an 
intelhgent  student  ought  to  have  no  real  difficulty  in  test- 
ing the  validity  of  the  definitions  and  the  methods  em- 
ployed ;  and  a  sincere  and  a  candid  student  should  not  hesi- 
tate to  yield  his  intellectual  assent  to  what  is  truth.     That 


PRELIMINARY— SOME  DEFINITIONS.  5 

we  may  do  the  science  and  its  professors  no  injustice,  we 
must  begin  with  them  at  the  beginning,  we  must  state  all 
their  premises,  examine  all  their  processes,  and  accept 
legitimate  conclusions.  That  we  may  not  be  the  victims 
of  mere  sophistry  and  rhetoric,  we  must  watch  them  closely. 
If  we  see  them  floundering  in  the  quagmire  of  the  assump- 
tions and  deductions  into  which  they  have  plunged,  it  is 
not  necessary  that  we  should  leave  solid  ground.  To  gar- 
ner the  really  few  grains  of  truth  which  they  have  thrashed 
out,  it  will  not  be  necessary  to  encumber  ourselves  with 
their  bushels  of  chail.  The  results,  when  reached,  should 
be  impersonal,  and  should  be  the  triumph  of  the  right,  of 
clear  and  absolute  knowledge.  Prof.  CliHe  Leslie  says,  in 
one  of  his  essays :  "  The  scientific  spirit  is  not  a  triumphant 
and  boastful  one,  fired  with  a  sort  of  intellectual  chauvin- 
ism^ seeking  polemical  distinction  and  a  path  to  promotion 
in  the  field  of  party  war.  A  cavalry- officer  of  the  period 
of  the  Crimean  AYar,  when  that  branch  of  the  anny  was 
distinguished  by  the  glory  of  a  mustache,  used  to  say  that 
no  man  could  conceive  the  jDitcli  to  which  human  conceit 
could  soar,  unless  he  had  served  in  a  light-dragoon  regiment. 
He  was,  however,  mistaken.  There  was  a  being  yet  more 
elate  with  a  sense  of  superiority  over  his  fellow-creatures 
in  the  economist  who  had  Bastiat  at  his  finger-ends,  and 
who  looked  on  political  economy  as  a  weapon  by  which  he 
could  discomfit  political  adversaries,  and  on  free  trade  as  a 
personal  triumph,  though  he  had  as  much  claim  to  renown 
for  it  as  a  passenger  in  a  Cunard  steamer  to  the  fame  of 
Columbus,"  Prof.  Bonamy  Price,  in  his  "  Chapters  on 
Practical  Economy,"  does  condescend  to  reargue  the  ques- 
tion, but  he  commiserates  the  dullness  which  resists  his 
demonstration,  "  conspicuous  and  complete,"  and  adds, 
"  one  is  tempted  to  feel  something  of  that  mortification 
which  a  mathematician  would  experience  if  he  was  com- 


6  PROTECTION    VS.  FREE  TRADE. 

pelled  to  demonstrate  anew  tlie  principles  of  the  multipli- 
cation-table." Prof.  Caimes,  so  lately  as  1874,  in  "  Some 
Leading  Principles  of  Political  Economy  newly  Expoimded," 
laments  the  necessity  of  restating  axioms :  "  Nevertlieless 
I  am  unwilling  to  leave  the  subject  of  these  chapters  ^\dth- 
out  some  fuller  consideration  than  has  yet  been  given  to  it 
of  the  great  controversy  not  yet,  unfortunately,  extinct,  of 
free  trade  vs.  protection,  I  have  said,  '  not  yet  extinct ' ; 
perhaps  I  should  rather  have  said  even  now  active  and 
glowing  mth  something  of  its  pristine  f eiwor ;  for  we  have 
only  to  tm-n  our  eyes  to  France  or  to  the  United  States, 
not  to  speak  of  om*  own  colonies,  to  see  with  what  vigor, 
and,  I  regret  to  say,  with  what  success,  the  venerable  soph- 
ism still  maintains  itself,  ahke  in  the  j)ubhc  press  and  in 
national  legislation." 

Isov  can  we  withhold  a  measm'e  of  sympathy  with  our 
own  Prof.  Perry.  In  the  edition  of  his  "  Political  Econo- 
my," 1873,  with  tnie  prophetic  fervor  he  had  said :  "  This 
doctrine,  clearly  an  outgrowth  of  the  mercantile  system,  is 
now  something  more  than  two  hundred  years  old,  and  is 
everywhere  in  its  decrepitude.  An  incurable  wound  was 
inflicted  on  it  by  the  publication  of  Adam  Smith's  '  Wealth 
of  Nations,'  in  1776;  the  centennial  of  that  event  and  of 
American  independence  will  probably  witness  very  little 
practical  vitality  in  it  anywhere  in  the  world ;  it  has  died 
out  utterly  in  Great  Britain,  where  it  once  had  a  \agorous 
life ;  it  colors  scarcely  at  all  the  revenue  systems  of  the 
German  and  Austrian  Empires ;  it  still  lingers  feebly  in 
Russia;  it  has  had  a  recent  temporary  revivification  in 
France ;  and,  though  steadily  and  rapidly  declining  in  the 
United  States,  it  has  been  strong  enough  here  to  control 
the  national  legislation  of  the  past  decade." 

In  1883,  with  somewhat  baffled  expectation,  the  lan- 
guage is :  "  The  taint,  however,  of  its  birth  and  breeding 


PRELIMINARY— SOME  DEFINITIONS.  7 

rests  on  it  like  a  curse ;  even  if  let  alone,  it  would  now 
have  been  in  its  decrepitude  owing  to  the  poisons  in  its 
blood ;  but  an  incurable  wound  was  inflicted  on  it  in  1776 
by  one  Adam  Smith,  hastening  it  toward  its  burial ;  the 
centennial  of  that  event  and  of  American  independence 
found  it  a  lingering  energy  of  evil,  especially  in  the  United 
States  "  (the  professor  might  have  added,  under  the  ma- 
lign and  crude  empiricism  of  such  statesmen  as  Bismarck 
and  Thiers,  also  in  Germany  and  France  ;  and,  as  if  m  the 
very  irony  of  science,  in  Canada  and  A^ictoria) ;  "  and  politi- 
cal economy,  denouncing  it  as  the  enemy  of  mankind,  hopes 
soon  to  throw  upon  its  loathsome  carcass  the  last  shovels- 
ful  of  cleansing  earth." 

Unfortunately  for  the  political  economists,  protection 
is  no  "  carcass."  It  is  still  a  live  subject  for  vivisection, 
and  the  "cleansing  earth"  seems  rather  to  withhold  its 
offices  for  those  who  are  now  wielding  the  scalpel  and  the 
dissecting-knife  over  it.  It  will  be  evident,  indeed,  that 
there  are  still  many  "unsettled  questions  in  political 
economy,"  as  there  were  when  John  Stuart  Mill  wrote  his 
elaborate  essay  imder  tliat  title.  In  his  "Essay  on  the 
Production  of  Wealth,"  Colonel  Torrens,  more  than  sixty 
years  ago,  said :  "  With  respect  to  political  economy,  the 
period  of  controversy  is  passing  away ;  and  that  of  una- 
nimity is  rapidly  approacliing.  Twenty  years  hence  there 
will  scarcely  exist  a  doubt  respecting  any  of  its  funda- 
mental principles."  At  the  end  of  the  twenty  years  Prof. 
Senior  pointed  out  the  want  of  definiteness  and  certainty  of 
meaning  in  the  tenns  "value,"  "wealth,"  "labor,"  "capi- 
tal," "  rent,"  "  wages,"  and  "  profits."  These  are  the  prin- 
cipal terms  in  the  science  of  political  economy.  "  AVhen," 
he  says,  "  we  read  the  most  eminent  of  the  recent  writers 
on  the  subject,  we  find  them  chiefly  engaged  in  controversy. 
Instead  of  being  able  to  use  the  works  of  his  feUow-labor- 


8  PROTECTION    VS.   FREE   TRADE. 

ers,  every  economist  begins  by  demolition  and  erects  a  new 
edifice,  resting  perhaps  in  a  great  measure  on  the  same 
foundation,  but  differing  from  all  that  have  preceded  it  in 
form  and  arrangement." 

Mr.  Mill  has  said  of  Adam  Smith's  "  Wealth  of  Na- 
tions "  that  "  it  is  in  many  parts  obsolete  and  in  all  imper- 
fect"; and  Stephen  Colwell,  a  competent  witness,  testifies 
that  the  successors  and  disciples  of  Adam  Smith  "  have  not 
hesitated  to  cut  and  carve,  and  apply  the  caustic  until  there 
is  scarcely  an  important  passage  in  the  whole  work  ('  Wealth 
of  Nations ')  which  some  one  of  his  friends  has  not  detached 
from  his  system  as  wrong  or  branded  as  absurd."  The  fate 
of  some  of  these  words  has  been  "  settled  "  by  the  late  econ- 
omists. Prof.  Perry,  of  Williams  College,  abolishes  the 
word  "  wealth  "  outright,  and  Prof.  Jevons  does  the  same 
by  "  value."  Of  Colonel  Torrens's  "  unlucky  prophecy," 
so  eminent  a  writer  as  Prof.  Cairnes,  as  lately  as  the  year 
1874,  says,  "  So  far  from  the  period  of  controversy  having 
passed,  it  seems  hardly  yet  to  have  begun — controversy,  I 
mean,  not  merely  respecting  propositions  of  secondary  im- 
portance, or  the  practical  application  of  scientific  doctrines, 
but  controversy  res])ectmg/'imda}nentalproj)ositions,  which 
lie  at  the  root  of  its  reasoning,  and  which  were  regarded  as 
settled  when  Colonel  Torrens  wrote." 

As  all  this  testimony  comes  from  well-laiown  teachers 
of  the  "  orthodox "  English  economy,  it  will  serve  to  put 
us  on  our  guard  as  we  go  with  them  hastily  through  the 
science,  its  definitions  and  development.  We  have  not  the 
space  to  pause  and  indicate  the  want  of  unanimity  in  defi- 
nitions and  ambiguity  and  confusion  in  their  application, 
except  so  far  as  they  bear  on  the  controversy  in  hand. 

Adam  Smith  (1776)  gives  no  definition  of  his  science. 
His  work  is  entitled  "An  Inquiry  into  the  ^Nature  and 
Causes  of  the  Wealth  of  Nations."     "  Political  economy," 


PRELIMINARY— SOME   DEFINITIONS.  9 

he  says,  "  proposes  two  distinct  objects  :  first,  to  provide  a 
plentiful  revenue  or  subsistence  for  the  people,  or,  more 
properly,  to  enable  them  to  provide  such  a  revenue  or  sub- 
sistence for  themselves ;  and,  secondly,  to  supply  the  state 
or  commonwealth  with  a  revenue  sufficient  for  the  public 
service.  It  proposes  to  enrich  both  the  peoj^le  and  the 
sovereign." 

Sir  James  Steuart  (1767) :  "  The  principal  object  of  the 
science  is  to  secure  a  certain  fund  of  subsistence  for  all  the 
inhabitants,  to  obviate  any  circumstance  which  may  render 
it  precarious  to  provide  anything  necessary  for  supplying 
the  wants  of  the  society,  and  to  employ  the  inhabitants 
(supposing  them  to  be  freemen)  in  such  manner  as  natu- 
rally to  create  recijyrocal  relations  and  dependencies  he- 
tween  them,  so  as  to  make  their  several  interests  lead  them 
to  supply  one  another  with  their  reciprocal  wants.  .  .  . 
JPoUtical  economy  in  each  country  must  necessarily  he 
different^  This  proposition  has  been  attacked  as  hetero- 
dox, but  it  will  be  seen  that  the  very  latest  writers  of  the 
orthodox  school  have  been  compelled  to  accept  it. 

M.  Say :  "  Political  economy  is  the  economy  of  society ; 
a  science  combining  the  results  of  our  observations  on  the 
nature  and  functions  of  the  different  parts  of  the  social 
body." 

Mr.  McCulloch  :  "  The  science  of  the  laws  which  regu- 
late the  production,  acciimulation,  distribution,  and  con- 
sumption of  those  articles  or  products  that  are  necessarily 
useful  or  agreeable  to  man  and  possess  exchangeable  value  " ; 
and  that  "  its  object  is  to  point  out  the  means  by  which 
the  industry  of  man  may  be  rendered  most  productive  of 
wealth,  to  ascertain  the  circumstances  most  favorable  to  its 
accumulation,  the  proportions  in  which  it  is  divided,  and 
the  mode  in  which  it  may  be  most  advantageously  con- 
sumed." 


XO  PKOTECTIOX    VS.   FKEE   TEADE. 

M.  Sismondi :  "  The  physical  "welfare  of  man,  so  far  as 
it  can  be  the  work  of  government,  is  the  object  of  political 
economy." 

M.  Storch :  "  Political  economy  is  the  science  of  the 
natural  laws  which  determine  the  prosperity  of  nations, 
that  is  to  say,  their  wealth  and  their  civilization." 

Prof.  Senior :  "  That  science  which  treats  of  the  na- 
ture, the  production,  and  the  distribution  of  wealth." 

Mr.  Mill :  "  Writers  on  political  economy  profess  to 
teach  or  to  investigate  the  natm-e  of  wealth,  and  the  laws 
of  its  production  and  distribution,  including,  directly  or 
remotely,  the  operation  of  all  the  causes  by  which  the  con- 
dition of  mankind  or  of  any  society  of  human  beings  in 
respect  to  this  universal  object  of  desire  is  made  prosper- 
ous or  the  reverse." 

Prof.  Itoscher :  "  Ey  the  science  of  national  or  political 
economy  we  understand  the  science  which  has  to  do  with 
the  laws  of  the  development  of  the  economy  of  a  nation. 
...  It  inquires  how  the  various  wants  of  the  people  of  a 
country,  especially  those  of  food,  clothing,  fuel,  shelter, 
etc.,  may  be  satisfied  ;  how  the  satisfaction  of  these  wants 
influences  the  aggregate  national  life,  and  how  in  time 
they  are  influenced  by  the  natianal  life." 

M.  Bastiat:  "Every  effort,  capable  of  satisfj-ing,  on 
condition  of  a  return,  the  wants  of  a  person  other  than  the 
man  who  makes  the  effort,  and  consequently  the  wants  and 
satisfactions  relative  to  this  species  of  effort,  constitute  the 
domain  of  political  economy.  .  .  .  Political  economy  is  the 
theory  of  exchange." 

Henry  C.  Carey :  "  The  science  of  the  laws  which  gov- 
ern man  in  his  efforts  to  secure  for  himself  the  highest  in- 
dividuality and  the  greatest  power  of  his  association  with 
his  fellow-men." 

Prof.  Francis  A.  Walker  :  "  Political  economy  or  eco- 


PRELIMINARY— SOME   DEFINITIONS.  U 

noinics  is  tlie  name  of  tliat  body  of  laiowledge  whicli  re- 
lates to  wealtli.  Political  economy  lias  to  do  with  no 
other  subject  whatever  than  wealth.  Especially  should  the 
student  of  economics  take  care  not  to  allow  any  purely 
political,  eUiical,  or  social  considerations  to  influence  him 
in  his  investigations.  All  that  he  has  as  an  economist  to 
do,  is  to  find  out  how  wealth  is  produced,  exchanged,  dis- 
tributed, and  consumed. 

"  It  will  remain  for  the  social  philosopher,  the  moralist, 
or  the  statesman  to  decide  how  far  the  pursuit  of  weahh, 
according  to  the  laws  discovered  by  the  economist,  should 
be  subordinated  to  other,  let  us  say  higher,  considerations. 
...  It  can  not  be  too  strongly  insisted  on  that  the  econo- 
mist as  such  has  nothing  to  do  with  the  questions — what 
men  had  better  do — how  nations  should  be  governed — or 
what  regulations  should  be  made  for  their  mutual  inter- 
course. His  business  is  simply  to  trace  economic  effects  to 
their  causes,  leaving  it  to  the  philosopher  of  every-day  life, 
to  the  moralist,  or  the  statesman,  to  teach  how  men  and 
nations  should  act  in  view  of  the  economical  principles  so 
estabhshed.  The  political  economist,  for  example,  has  no 
more  call  to  preach  free  trade,  as  the  policy  of  nations,  than 
a  physiologist  to  advocate  monogamy  as  a  legal  institution." 

Prof.  Sidgwick :  "  Pohtical  economy,  in  England  at 
least,  is  now  almost  universally  understood  to  be  a  study  or 
inquiry  concerned  with  the  production,  distribution,  and 
exchange  of  wealth." 

Prof.  Bowen :  "  On  what  principles  do  men  readily 
exchange  these  articles  "  (the  aggregate  of  things  which  we 
call  wealth)  "  for  each  other  ;  and  what  motives,  what  gen- 
eral laws,  regulate  their  production,  distribution,  and  con- 
sumption ?  Political  economy  undertakes  to  answer  this 
question,  and  is  therefore  properly  considered  one  of  the 
moral  sciences." 


12  PliOTECTIOX    VS.  FREE   TRADE. 

Prof.  Perry  classes  economics  as  a  moral  science  with 
metaphysics  and  ethics.  "  Is  there  a  single  class  of  facts, 
easily  conceived  of  and  defined  as  such,  .  .  .  with  M'hich 
alone  political  economy  has  to  do?  We  answer  :  Yes. 
Sales  are  a  very  definite  thing.  They  are  never  confounded 
with  gifts,  and  thev  are  never  confounded  with  thefts.  .  .  . 
Pohtical  economy  is  the  science  of  sales  or  exchanges. 
Anything  whatsoever  that  is  salable,  or  can  be  made  so, 
comes  within  its  view,  and,  scientifically,  it  cares  nothing 
whatever  for  anything  elseP 

Prof.  Caimes  :  "  The  science  which  traces  the  phenom- 
ena of  the  production  and  distribution  of  wealth  w^  to  their 
causes  in  the  jprincijyles  of  human  nature  and  the  laws 
and  evQnts,  ])hysical,  jpolitical,  and  social,  of  the  external 
world." 

With  this  diversity  in  premises,  it  is  manifest  that  there 
is  a  wide  margin  for  diversity  in  the  conclusions  reached 
by  the  professors  of  the  science. 

The  most  manageable  definition,  and  the  one  from 
which  advance  may  most  easily  be  made  into  the  region  of 
actual  experience,  is  that  of  M.  de  Laveleye.  It  is  the  one 
upon  which  the  discussion  which  follows  is  based : 

"  Political  economy  may  therefore  be  defined  as  the 
science  which  determines  what  laws  men  ought  to  adopt 
in  order  that  they  may,  vjith  the  least  possible  exertion, 
procure  the  greatest  abundance  of  things  useful  for  the 
satisfaction  of  their  wants,  may  distribute  them  justly  and 
consume  them  rationally." 


CHAPTER  11. 

THE    SCIENCE    OF    rOLITICAL    ECONOMY — THE    MECHANISM    OF 
PEODUCTION. 

Having  thus  made  his  definitions  and  set  the  limits  to 
the  "  field  of  the  science,"  let  us  see  briefly  how  the  politi- 
cal economist  proceeds  to  develop  his  subject.  The  method 
will  be  familiar  to  every  student  and  high-school  pupil. 
He  attempts  an  analysis  of  the  social  structure.  By  close 
and  accurate  observations  he  midertakes  to  ascertain  what 
is  going  on  in  the  organism  about  him.  He  takes  account 
of  the  activities  in  operation  and  endeavors  to  trace  the 
details  of  these  operations.  The  motive  power  he  finds  in 
human  nature.  It  is  the  "  satisfaction  of  human  wants," 
"  with  the  least  possible  effort."  It  is  not  alone  the  crav- 
ings of  hunger  and  thirst,  the  effects  of  heat  and  cold,  of 
drought  and  damp.  The  satisfaction  of  every  lower  want 
in  the  scale  creates, a  desire  of  a  higher  character.  Ko 
limit  is  thus  set  to  the  labors  of  humanity.  As  the  satis- 
faction of  our  desires  can  not  be  had  except  on  the  con- 
dition of  being  consumers,  purchasers,  each  one  is,  in  the 
main,  under  the  necessity  of  producing  that  which  he  ex- 
changes. "  Every  man  who  puts  forth  an  effort  to  satisfy 
the  desire  of  another,  with  the  expectation  of  a  return,  is 
a  producer."  To  the  extent  to  which  he  dii'ectly  satisfies 
his  own  wants  by  his  own  labor,  he  is  not  in  the  contem- 
plation of  the  political  economists.  The  man  or  the  nation 
which  can  satisfy  its  own  wants  by  its  O'^ti  labor,  neither 


14  PROTECTION    VS.   FREE   TRADE. 

needs  foreign  exchanges  nor  tlie  aid  of  any  science  of 
foreign  exchanges.  "  AVhen  a  man  shaves  his  own  face, 
our  science  has  nothing  to  say — when  the  barber  shaves 
him  for  a  fee,  it  has  a  good  deal  to  say." 

The  instruments  of  production  are  labor,  capital,  and 
land,  or  natural  agents.  "  The  produce  of  the  earth — all 
that  is  derived  from  its  surface  by  the  united  application 
of  labor,  machinery,  and  capital — is  divided  among  three 
classes  of  the  community :  the  proprietor  of  the  land,  the 
owTier  of  the  stock,  or  capital  necessary  for  its  cultivation, 
and  the  laborer,  by  whose  industry  it  is  cultivated.  To 
deteraiine  the  laws  which  regulate  this  distribution  is  the 
principal  problem  in  political  economy."  Tliis  is  Mr. 
Eicardo's  formula.  These  laws  operate  indeiDendently  of 
human  interference,  and,  by  consequence,  he  did  not  con- 
sider wealth  in  connection  with  human  welfare. 

The  share  of  the  proprietor  of  the  land,  or  other  natural 
agent,  is  called  rent ;  the  share  of  the  owner  of  the  stock, 
or  capital,  is  called  profit ;  the  share  of  the  laborer  is  called 
wages.  Whatever  may  be  the  nature  of  the  finished  prod- 
uct, whether  of  an  agricultural  or  a  manufacturing  process, 
the  problem  of  the  science  is  to  ascertain  the  share  which 
goes  to  each  of  the  agents  concerned  in  its  production. 
Keally  prehminary  to  the  actual  process  which  issues  in  the 
product  is  an  inquiry  involving  data  lying  still  deeper  in 
human  nature,  to  wit,  the  impulse  under  which  men  engage 
at  all  in  societary  co-operation.  This  leads  to  the  science 
of  society  or  sociology.  Passing  that  for  the  present,  we 
endeavor  to  ascertain  the  laws  which  determine  the  dis- 
tributive share  of  each  in  the  joint  result. 

It  may  as  well  be  confessed,  at  the  outset,  that  no  laws 
can  be  laid  down  which  give  us  the  slightest  assurance  that 
true  sequence  of  facts  and  their  relation  has  been  ascer- 
tained.    Competition  has  been  supposed  to  be  the  optimis- 


THE   SCIENCE   OF  TOLITICAL   ECONOMY.  15 

tic  (or  pessimistic)  Jack-of -all-trades  which  brings  {il)out  the 
equilibrium  of  the  contesting  claimants.  Competition  be- 
tween the  owners  of  capital  lowers  interest  and  profits ; 
between  landlords  it  lowers  rent ;  between  laborers  it  low- 
ers wagcs.^  In  all  these  cases,  the  value  of  the  services 
offered  are  said  to  depend  on  "  supply  and  demand,"  or 
the  price  of  commodities  is  said  to  depend  on  cost  of  pro- 
duction, or  the  cost  of  reproduction.  The  cost  of  produc- 
tion is  said  to  consist  of  "  wages  and  profits,"  or  the  ex- 
pectation of  profits.  Sometimes  it  is  said  the  price  varies 
with  the  demand,  and  again,  that  the  demand  varies  with 
the  price.  Or,  again,  the  supply  is  said  to  determine  the 
price,  and  still  again,  the  price  is  said  to  create  or  deter- 
mine the  supply.  In  all  this  ceaseless  round  of  human 
activities,  it  seems  to  be  agreed  that  no  law  has  been  dis- 
covered which  awaj'ds  the  results  of  labor  on  the  maxim, 
either  "  to  each  according  to  his  wants  " — "  to  each  accord- 
ing to  his  work  " — or  "  to  each  according  to  his  sacrifice." 
It  can  not  be  doubted  that,  if  the  science  of  political  econ- 
omy could  discover  any  laws  which  would  lead  to  a  just 
scheme  of  distribution,  they  would  be  recognized  and  en- 
forced. 

"It  is  only  exertion  which  demands  for  itself  some- 
thing in  exchange  that  is,  technically,  labor.  ...  So  far  as 
exertion,  physical  or  mental,  is  put  forth  for  amusement, 
physical  or  mental,  it  has  nothing  to  do  with  political  econ- 
omy." 

"  Labor,"  says  Adam  Smith,  "  was  the  first  price,  the 
original  purchase-money  paid  for  all  things,  and  it  consti- 
tutes the  ultimate  and  real  standard  by  which  their  value 

'  Herein  is  seen  the  underlying  fallacy  of  much  of  the  agitation  and  dis- 
cussion which  assumes  that  "  capital "  and  "  labor "  are  in  competition. 
They  are  not.  The  competition  is  that  of  capital  with  capital,  and  labor 
with  labor. 


l^  PROTECTION    VS.  FREE  TRADE. 

can  be  estimated  and  compared.-'  The  natural  price  of 
labor,  according  to  Kicardo,  is  "  that  price  which  is  neces- 
sary to  enable  the  laborers,  one  with  another,  to  subsist  and 
perpetuate  their  race  without  increase  or  diminution." 

The  text- writers  usually  divide  it  into  common,  skilled, 
and  professional  labor.  Following  Adam  Smith,  they  lay 
it  down  that  the  rate  of  wages  will  be  determined,  in  their 
action  on  the  supply  of  labor,  by  the  agreeableness  or  dis- 
agreeableness  of  the  emplo^onent ;  the  easiness  and  cheap- 
ness, or  the  difficulty  and  expense,  of  learning  the  different 
employments  ;  the  constancy  or  inconstancy  of  employ- 
ment ;  the  amount  of  trust  involved ;  the  probability  of 
success ;  custom,  prejudice,  and  fashion ;  legal  restrictions 
and  voluntary  associations  (under  this  head  is  discussed  the 
operation  of  guilds  and  trades-unions);  and  the  mobihty 
of  laborers,  or  the  lack  of  it.  The  last  consideration  has  an 
important  economic  beanng  on  the  question  of  interna- 
tional trade,  and  we  shall  have  occasion  to  recur  to  it. 

Many  recent  economists  have  recognized  a  distinct  class 
of  "laborers,"  whom,  for  the  want  of  a  proper  English 
word,  they  call  entrepreneurs  (undertakers).  These  are  the 
organizers  of  our  great  industries,  and  their  compensation 
is  referred  to  the  head  of  "  profits."  They  receive  what  is 
called  the  "  wages  of  management."  The  modem  indus- 
trial organization  is,  indeed,  based  upon  the  high  executive 
skill  of  this  class  of  men. 

"  Capital "  has  had  almost  as  many  definitions  as  there 
have  been  writers  on  the  subject,  and  does  not  appear  as 
yet  to  have  any  generally  received  meaning.  The  dis- 
tinction between  "  capital  "  and  "  money  "  is  all-important, 
and  must  be  borne  constantly  in  mind. 

Mr.  Carey  defines  it  as  "  the  instrument  by  means  of 
which  man  obtains  mastery  over  Nature,"  and  includes  the 
mental  powers  of  man  himself  as  well  as  his  physical  pow- 


THE  SCIEXCE  OF  POLITICAL  ECOXOMY.  17 

ers.  Macleod  calls  capital  "any  economic  quantity  used 
for  the  purpose  of  profit."  Prof.  Senior  defines  it  as  "  an 
article  of  wealth,  the  result  of  human  exertion,  employed 
in  the  production  and  distribution  of  wealth." 

Adam  Smith :  "  That  part  of  a  man's  stock  which  he 
expects  to  afford  him  revenue  is  called  his  capital." 

Ricardo :  "  Capital  is  that  part  of  the  wealth  of  a  coun- 
try which  is  employed  in  production,  and  consists  of  food, 
clothing,  tools,  raw  materials,  machinery,  etc.,  necessary  to 
give  effect  to  labor." 

J.  S.  Mill :  "  The  distinction  between  capital  and  not- 
capital  does  not  lie  in  the  kind  of  commodities,  but  in  the 
mind  of  the  capitalist — in  his  will  to  employ  them  for  one 
puq)Ose  rather  than  another ;  and  all  property,  however  ill 
adapted  itself  for  the  use  of  labor,  is  a  part  of  capital  so 
soon  as  it,  or  the  value  to  be  received  from  it,  is  set  apart 
for  productive  reinvestment.  The  sum  of  all  the  values  so 
destined  by  their  respective  possessors  composes  the  capital 
of  the  country." 

Prof.  Sidgwick  does  not  define  capital,  but  he  adverts 
to  the  fact  that  a  different  signification  is  given  to  the  term 
capital  by  the  man  of  business  and  the  economist.  The 
former  understands  by  it  "  wealth  employed  so  as  to  yield 
a  profit,"  whether  this  profit  be  gained  by  increasing  the 
whole  stock  of  wealth  in  the  country,  or  by  getting  posses- 
sion of  the  wealth  of  others,  in  exchange  for  services.  The 
latter  understands  it  as  "  wealth  employed  in  production." 
This  distinction  will  be  useful. 

Prof.  Perry:  "Anything  valuable  outside  of  man  him- 
self which  becomes  a  means  in  further  production."  This 
definition  excludes  physical  and  mental  powers,  skill,  hon- 
esty, etc.  The  reward  for  these  is  wages.  But,  while  not 
capital,  these  are  agencies  in  production,  quite  as  indispen- 
sable as  conditions.     "Capital  is  some  product,  always  a 


18  PROTECTION    VS.  FREE   TRADE. 

commoditj  or  a  claim,  reserved  for  the  sake  of  an  increase 
to  present  values  through  its  employment  productively, 
which  increase  is  called  profits." 

Prof.  Jevons  :  "  Capital,  as  I  regard  it,  consists  merely 
in  the  aggregate  of  those  commodities  which  are  required 
for  sustaining  laborers  of  any  kind  or  class  engaged  in 
work."  A  stock  of  food  is  the  main  element  of  capital. 
The  current  means  of  sustenance  constitute  capital  in  its 
free  or  unassisted  form.  "  The  function  of  capital  is  to 
enable  the  laborer  to  await  the  results  of  his  labor." 

"  A  claim "  is  "  a  right  to  demand  in  the  future." 
Prof.  Perry  says  this  is  capital — a  position  much  contro- 
verted. "  Credit "  represents  the  outcome  of  those  claims, 
and  we  all  know  how  enormously  they  have  been  extended 
in  modern  times.  "  Credit  not  only  convenes  exchanges 
but  also  creates  them ;  it  brings  something  new  into  the 
world  of  traffic,  a  new  class  of  things  bought  and  sold, 
values  that  would  not  otherwise  have  existed  at  all.  It  en- 
larges the  field  of  political  economy,  and  makes  a  new 
grand  division  of  time  pay  tribute  to  the  world  of  sales. 
The  past  is  represented  in  commodities,  the  present  in 
personal  services,  and  the  future  in  credits.  .  .  .  The  chief 
gain  for  individuals  and  for  the  whole  community  in 
the  use  of  proper  credits  ...  is  found  in  the  fact  that  a 
new  capital  is  thereby  created,  a  new  purchasing  power, 
something  in  the  world  of  values  additional  to  what  ex- 
isted before." 

Are  intellectual  and  moral  powers  capital  ?  Prof.  Se- 
nior has  said,  "  It  is  not  on  the  accidents  of  soil  or  climate, 
or  on  the  existing  accumulation  of  the  material  instru- 
ments of  production,  but  on  the  quantity  and  the  diffusion 
of  this  immaterial  capital"  (Imowledge,  skill,  education), 
"  that  the  wealth  of  a  country  depends."  If,  as  we  shall 
have  occasion  to  see,  political  economy  undertakes  to  ex- 


THE   SCIENCE   OF  POLITICAL  ECONOMY.  19 

elude  these  considerations  from  its  economic  view,  so  mucli 
the  worse  for  the  science. 

Economists,  then,  divide  capital  into  "fixed"  capital 
and  "  circulating  "  capital — into  "  consumers'  "  capital  and 
"  producers'  "  capital.  "  Circulating  capital  is  all  new  mate- 
rials— all  wages  paid  out  in  view  of  ultimate  profit — com- 
pleted products  on  hand  for  sale — all  products  bought  and 
held  for  the  sake  of  resale.  Fixed  capital  will  be  found 
under  one  or  other  of  the  following  heads :  all  tools  and 
machinery — all  buildings  used  for  production  purposes — 
all  permanent  improvements  on  land — all  investments  in 
aid  of  locomotion,  such  as  raih'oads,  canals,  ships,  and 
ever}i;hing  subsidiary  to  them — all  products  loaned  or 
rented  or  retained  for  that  purpose — and  the  national 
money  as  a  whole."     (Prof.  Perry.) 

Capital  is  the  result  of  saving.  It  results  from  the  act 
of  a  person  who  either  abstains  from  the  unproductive  use 
of  what  he  can  command,  or  prefers  the  production  of 
remote  to  that  of  immediate  results. 

Prof.  Senior  very  philosophically  substituted  the  word 
"abstinence"  for  "profit."  It  expresses  the  act  or  con- 
duct of  which  profit  is  the  reward,  and  which  bears  the 
same  relation  to  profit  that  labor  does  to  wages.  "  By 
the  M^ord  abstinence  we  wish  to  express  that  agent,  distinct 
from  labor  and  the  agency  of  nature,  the  concurrence  of 
which  is  necessary  to  the  existence  of  capital,  and  which 
stands  in  the  same  relation  to  profit  as  labor  does  to  wages." 

Capital  may  be  indefinitely  increased  by  using  the  re- 
sults of  saving,  or  the  products  of  labor  and  the  other  in- 
struments of  production,  for  the  purpose  of  further  pro- 
duction. 

"  Productive  consumption  is  that  use  of  a  commodity 
which  occasions  an  ulterior  product.  Unproductive  con- 
sumption is,  of  course,  that  use  which  occasions  no  ulterior 


20  PROTECTION    VS.   FREE  TRADE. 

product.  The  characteristic  of  unproductive  cousumption 
is,  that  it  adds  to  the  enjoyment  of  no  one  but  the  con- 
sumer himself.  Its  only  effect  upon  the  rest  of  the  com- 
munity is  to  diminish  pro  tanto  the  mass  of  commodities 
applicable  to  their  use." 

The  remuneration  to  the  proprietor  of  land  is  called 
rent.  Land,  in  this  connection,  includes  mines,  rivers,  and 
ports — indeed,  any  appropriated  natural  agents,  Hmited  in 
extent  or  number.  The  definitions  of  rent  given  below 
will  show  the  different  theories  upon  which  it  is  supposed 
rent  accrues. 

Ricardo :  "  Rent  is  that  portion  of  the  produce  of  the 
earth  which  is  paid  to  the  landlord  for  the  use  of  the  origi- 
nal and  indestructible  powers  of  the  soil."  This  view  of 
rent  has  been  adopted  by  Prof.  Senior,  John  Stuart  Mill, 
and  the  great  body  of  English  economists. 

Prof.  Perry  defines  rent  (edition  of  1883)  as  follows : 
"  The  rent  of  leased  lands  is  the  measure  of  the  service 
which  the  owner  of  the  land  thereby  renders  to  the  actual 
cultivator  of  it,"  (having  added  in  the  edition  of  1873) 
'  and  does  not  differ  essentially  in  its  return  from  the  rents 
of  buildings  in  cities  or  from  the  interest  of  money."  The 
philosophy  of  Henry  C.  Carey  and  Frederic  Bastiat,  whom 
Perry  follows,  led  them  to  this  conception  of  the  nature  of 
rent,  because  they  held  that  in  all  schemes  of  production 
the  utilities  of  nature  were  gratuitous.  Prof.  Perry  says, 
after  Carey  and  Bastiat,  that  there  are  no  "  original  and 
indestructible  powers  of  the  soil,  and,  if  there  were,  they 
are  God's  gifts,  and  no  one  is  authorized  to  take  pay  for 
their  use.  Land  derives  its  value  from  the  onerous  con- 
tributions of  man."  "VVe  shall  have  a  necessity  further  on 
to  look  into  this  matter.  A  correct  understanding  of  the 
nature  of  rent  is  a  fundamental  one  in  social  science.  Of 
Ricardo's  "  Theory  of  Rent,"  including  "  the  law  of  di- 


THE   SCIENCE   OF   POLITICAL   ECONOMY.  21 

minishing  production  from  laud,"  Mr.  Mill  has  said  :  "  This 
general  law  of  agricultural  industry  is  the  most  important 
proposition  in  political  economy.  AVere  the  law  different, 
nearly  all  the  phenomena  of  the  production  and  distribu- 
tion of  wealth  would  be  other  than  they  are."  ^ 

Under  the  head  of  land,  the  economist  usually  treats  of 
the  tenure  under  which  lands  are  held,  the  laws  of  descent, 
etc. 

Where  the  proprietor  and  the  cultivator  are  the  same 
person,  he  is  the  recipient  of  both  rent  and  profit  in  virtue 
of  the  double  relation  he  bears  to  a  natural  agent  of  pro- 
duction. 

Writers  on  economics  generally  hold  that  the  proceeds 
of  a  given  jiroduct  are  distributed  in  the  following  order : 
First,  rent ;  second,  interest ;  third,  profits  ;  fourth,  wages. 

The  conditions  of  successful  production  are :  Associa- 
tion, the  coming  together  of  men  of  various  desires,  various 
capacities,  and  various  employments ;  division  of  labor,  in 
which  connection  international  commerce  has  been  desig- 
nated as  making  "  territorial  division  of  labor "  possible  ; 
and  invention,  by  which,  to  a  greater  and  greater  extent, 
we  are  enabled  to  employ  the  gratuitous  forces  of  nature 
by  means  of  mechanical  and  chemical  discoveries. 

We  may  as  well  pause  here  long  enough  to  indicate 
that  the  entire  theory  of  free  trade  is  based  on  the  notion 
of  "  division  of  labor."  In  short,  it  is  this :  "  The  only 
reason  why  men  ever  exchange  services  at  all  is  on  the 
ground  of  relative  superiority  at  difl^erent  points.  The 
tailor  makes  the  blacksmith's  coat  and  the  blacksmith  shoes 

*  "  Rent  is  the  surplus  of  the  crop  above  the  cost  of  cultivation  on  the 
least  productive  lands  contributing  to  supply  the  market.  Admitting  the 
private  ownership  of  land,  that  surplus,  necessarily,  so  far  as  economic  forces 
are  concerned,  is  left  in  the  hands  of  the  landlord.  There,  so  far  as  eco- 
nomic forces  are  concerned,  it  must  remain." — Prof.  Francis  A.  Walker. 


22  PROTECTION    VS.  FREE  TRADE. 

tlie  tailor's  horses  for  no  otlier  reason  in  the  world  except 
that  each  has  a  relative  advantage  of  the  other  in  his  own 
work,  and  therefore  there  is  a  mutual  gain  in  their  ex- 
chano-ing  works."  It  is  manifestly  assumed  in  this  regime 
that  the  tailor  has  a  market  for  all  his  products  as  a  tailor, 
and  that  he  can  expend  all  his  time  and  skill  in  the  pro- 
duction of  commodities  in  which  he  has  this  relative  ad- 
vantage, and  that  lie  has  a  market  for  these  commodities. 

And  so  of  the  blacksmith.  If  there  is  not  a  market 
for  all  the  commodities  which  he  can  produce  as  a  hlack- 
smith — the  occupation  in  which  he  has  the  greatest  rela- 
tive advantages — he  must  embody  his  surplus  time  and 
skill  in  the  production  of  some  other  commodity  or  stand 
idle.     Thus  much  of  individuals. 

The  same  of  nations.  The  diversity  of  relative  advan- 
tages at  different  points  exhibited  by  different  nations  is 
the  basis  of  international  exchanges. 

"  The  various  countries  of  the  earth  have  received  from 
the  hands  of  God  a  diversity  of  original  gifts,  in  soil,  nat- 
ural productions,  position,  and  opportunity.  This  diversity 
exists  for  a  good  design"  (note  the  subtle  introduction  of 
theological  predilection  in  this  phrase),  "and  can  never  be 
substantially  reduced  by  man,  even  if  there  were,  as  there 
is  not,  any  good  reason  for  desiring  to  reduce  it.  Besides 
original  diversity  in  these  respects,  there  has  been  devel- 
oped in  the  history  of  the  inhabitants  of  these  countries  a 
diversity  of  tastes,  aptitudes,  habits,  strength,  intelligence, 
and  skill  to  avail  themselves  of  the  forces  of  nature  around 
them.  These  differences  are  somewhat  less  inherent  and 
more  flexible  than  the  others,  but  they  exist  and  always 
have  existed,  and  in  a  greater  or  less  degree  always  will 
exist,  and  it  is  in  these  diversities,  original,  traditional,  and 
acquired,  that  international  commerce  depends.  .  .  .  There 
is  no  mutual  gain  in  any  series  of  exchanges,  unless  each 


THE  SCIENCE   OF  POLITICAL  ECONOMY.  93 

party  has  a  superior  power  in  producing  that  which  is  ren- 
dered, compared  with  his  power  in  producing  that  which  is 
received."     (Prof.  Perry.) 

Tliis  is  a  correct  exposition  of  the  motive  and  conditions 
of  foreign  trade.  The  free-trader  assigns  to  the  United 
States  the  production  of  tlie  things  in  which  we  have  the 
superiority  over  other  nations ;  and  on  these  products  we 
accept  our  assignment  in  "  the  international  division  of  la- 
bor." But  we  accept  this  role  on  the  further  unalterable 
alternative  presented  by  Adam  Smith  in  the  "  Wealth  of 
Nations  " : 

"  The  division  of  labor  is  limited  hy  the  extent  of  the 
market.  Before  any  man,  or  any  set  of  men,  can,  in  com- 
mon prudence,  devote  themselves  to  any  particulai*  employ- 
ment, they  must  be  assured  that  they  can  dispose  of  the 
commodity  which  their  exertions  in  the  prosecution  of  that 
employment  will  produce.  In  situations  where  there  is 
not  a  sufficient  number  of  customers  near  at  hand  to  con- 
sume the  manufactured  article  "  (in  our  case,  for  "  manu- 
factured article,"  substitute  "  food  and  raw  material "),  "  or 
where  it  can  not  with  advantage  be  transported  to  those  at  a 
distance,  the  making  of  that  article  can  never  become  the 
exclusive  employment  of  any  man  or  set  of  men.  Where, 
therefore,  there  is  not  a  sufficiently  extensive  m.arhet,  labor 
can  not  be  so  much  subdivided  as  it  otherwise  would,  and 
its  productive  poioers  are  cramped  for  want  of  room  in 
vjhich  to  exert  themselves P 

We  venture  to  anticipate  the  discussion  so  much  as  to 
predict  that  Prof.  Perry's  premises,  Adam  Smith's  dic- 
tum, the  productive  forces  of  the  United  States,  and  the 
world's  market,  wdll,  when  put  in  conjunction,  consti- 
tute a  quadrilateral  within  which  free  foreign  trade  in 
America  must  perish  of  inanity. 

The  causes  which  determine  the  productiveness  of  labor 


24  PROTECTION    VS.   FREE   TRADE. 

are,  lirst,  the  personal  cliaraeter  of  the  kborer,  his  corporeal, 
intellectual,  and  moral  qualities ;  secondly,  the  degree  in 
which  he  is  assisted  by  natural  agents ;  thirdly,  the  degree 
in  which  he  is  assisted  by  crvpital ;  fourthly,  the  degree  of 
freedom  with  which  he  is  allowed  to  dii-ect  his  industry. 
(Prof.  Senior.) 

Inasmuch  as  almost  all  commodities  are  produced,  or 
most  efforts  are  put  forth,  for  the  purpose  of  being  ex- 
changed, we  come  to  the  conditions  under  which  exchanges 
are  made  :  "  Men  have  desires,  are  capable  of  making  ef- 
forts to  meet  those  desires,  and  experience  a  satisfaction 
when  the  desires  are  met.  .  .  .  Desires,  efforts,  satisfac- 
tions, constitute  the  one  circle  of  political  economy,  and 
value  arises  in  every  case  from  a  comparison  of  two  cor- 
responding efforts.  Efforts  are  naturally  irksome.  Every- 
body wishes  to  realize  as  large  a  satisfaction  as  possible 
from  a  given  effort.  If,  by  making  that  effort  for  another, 
a  larger  satisfaction  wiU  be  realized  than  by  expending  it 
directly  for  one's  self,  there  is  an  immediate  and  pressing 
motive  to  make  the  effort  for  another,  and  to  reach  the  sat- 
isfaction not  directly,  but  indirectly,  that  is,  by  exchange." 
(Perry.)  The  adoption  of  a  system  of  exchanges  makes  the 
possession  of  value  of  any  kind  equivalent  to  the  possession 
of  the  objects  of  personal  desire.  Value,  then,  is  the  me- 
diator between  exchanges.  Perhaps  the  common  sense  of 
mankind  has  had  no  practical  difficulty  with  this  word,  but 
the  mode  in  which  the  conception  is  generated  has  been 
wrestled  with  by  professional  writers.  Henry  C.  Carey 
was  the  first  one  who  worked  it  out  by  means  of  any  wide 
view  of  the  nature  of  the  social  structure,  and  the  action 
and  interaction  of  tlie  powers  of  man  and  nature.  In  a 
general  way,  it  had  been  treated  as  growing  out  of  labor — 
as  affected  by  the  scarcity  of  the  commodity  in  which  it 
was  incorporated — by  supply  and  demand,  by  utility,  ca- 


THE  SCIENCE  OF  TOLITICAL  ECONOMY.  25 

pability  of  accumulation,  conservability,  and  so  on.  Mr. 
Carey  says :  "  Utility  is  the  measiu*e  of  man's  power  over 
nature,  value  is  tlie  measure  of  nature's  power  over  man. 
The  former  grows,  the  latter  declines,  with  the  power  of 
combination  among  men."  These  definitions  are  exceed- 
ingly abstract,  but  they  logically  contain  the  philosophy 
which  Mr.  Carey  promulgated.  They  are  the  first  dis- 
closure of  a  scheme  which  gives  valuable  things,  wealthy 
their  true  function  in  a  human  progressive  society.  They 
are  the  basis  of  the  optimistic  view  which  he,  and  after 
him  Frederic  Bastiat,  takes  of  the  final  outcome  of  human 
society.  The  latter's  correlative  propositions  are  :  "  In  the 
state  of  isolation,  our  wants  exceed  our  powers ;  in  the  so- 
cial state,  our  powers  exceed  our  wants."  The  result  of 
this  exposition  of  the  whole  of  social  science  is  thus  ex- 
pressed :  "  The  constant  approximation  of  all  men  toward  a 
level,  which  is  always  riainy  ',  in  other  ierrm,,  improvement 
and  equalization  •  in  a  single  M'ord,  iiakmony." 

The  general  notion  is  thus  developed  by  Bastiat :  "  Let 
us  accustom  ourselves  to  distinguish  ntility  irom.  value; 
without  this  there  can  be  no  economic  science.  I  give 
utterance  to  no  paradox  when  I  affirm  that  utility  and 
value,  so  far  from  being  identical,  are  ideas  opposed  to 
one  another.  Want,  efforts,  satisfaction :  here  we  have 
man  regarded  in  an  economic  point  of  view.  The  relation 
of  utility  is  with  want  and  satisfaction.  The  relation  of 
value  is  with  effort.  Utility  is  the  good,  w'hich  puts  an 
end  to  the  want  by  the  satisfaction.  Value  is  the  evil,  for 
it  springs  from  the  obstacle  which  is  interposed  between 
the  want  and  the  satisfaction.  But  for  these  obstacles  there 
would  have  been  no  effort  either  to  make  or  to  exchange. 
UtiHty  would  be  infinite,  gratuitous,  and  common,  without 
condition,  and  the  notion  of  value  would  never  have  en- 
tered the  world.  In  consequence  of  these  obstacles,  utility 
3 


26  TROTECTION    VS.   FREE   TRADE. 

is  gratuitous  only  on  condition  of  efforts  exciianged,  which, 
when  comj)ared  with  each  other,  give  rise  to  value.  The 
more  these  obstacles  give  way  before  the  Hberality  of  na- 
ture and  the  progress  of  science,  the  more  does  utility  ap- 
proximate to  the  state  of  being  absolutely  common  and 
gratuitous ;  for  the  onerous  conditions,  and  consequently  the 
value,  diminish  as  the  obstacles  diminish.  I  shall  esteem 
myself  fortunate  if,  by  these  dissertations,  which  may  be 
subtile,  I  succeed  in  estabHshing  this  encouraging  truth, 
the  leglUmate  jyroperty  of  value,  and  this  other  truth, 
equally  consoling,  the  'progressive  community  of  utility." 
These  considerations  certainly  open  a  hopeful  view  of  the 
future  supremacy  of  the  human  family  over  the  forces  of 
nature.  If  the  logic  and  rhetoric  of  Bastiat  had  stood  him 
in  as  good  stead  in  the  whole  of  his  discussion,  he  need  not 
have  separated  from  Mr.  Carey  on  tlie  question  of  "  pro- 
tection." 

"  The  utility  involved  in  every  valuable  service  is  de- 
rived from  two  sources — the  free  contribution  of  nature 
and  the  onerous  contribution  of  man.  If  the  service  be 
"unique,  if  only  one  person  or  a  few  be  in  a  position  to  ren- 
der it,  no  useful  priuci^^le  can  be  laid  down  which  shall 
discriminate  the  two  component  parts  of  the  utility ;  but 
in  respect  to  the  vast  mass  of  services,  of  which  a  market 
rate  can  be  predicated,  it  is  very  clear  that  the  competition 
with  each  other  of  those  who  are  ready  to  render  them  will 
fix  the  current  value  at  a  point  which  shall  just  about  com-- 
pensate  for  the  onerous  element  involved.  That  portion 
of  the  utihty  which  is  the  free  gift  of  nature  will  be  very 
nearly  a  common  factor  in  that  whole  set  of  services'.  The 
action  of  com.jyetltion  roill  eliminate  this  common  factor, 
and  tend  constantly  to  determine  value  on  the  hasis  inerely 
of  what  man  has  done  to  impart  utility  to  those  services.^'' 
(Prof.  Perry.) 


THE   SCIEXCE   OF   TOLITICAL   ECOXOMY.  £7 

Yalue  is  not  in  the  material  tiling,  it  is  no  quality  of 
the  commodity.  But,  inasmuch  as  sei'vices  are  mainly 
incorporated  in  material  things,  it  seems  hkely  that  the 
human  family  will  continue  to  exchange  their  products 
and  services  without  much  regard  to  the  metaphysics  of 
the  ease. 

Value,  then,  is  "  the  relation  of  mutual  exchange  estab- 
lished between  two  services  by  their  exchange." 

As  men  can  not,  as  a  general  thing,  exchange  their 
products  directly  with  each  other — as  barter  is  impossible 
in  any  extended  commercial  organization — the  invention 
of  some  medium  of  exchange  was  natural  and  necessary. 
Money  is  that  medium.  It  is  the  great  economic  agent  to 
bring  the  producer  and  consumer  together.  It  is  the  great 
instrument  of  association  between  men.  Coin,  token-coin, 
convertible  and  inconvertible  notes,  legal  tender  and  not- 
legal  tender,  bankers'  credits,  checks,  mercantile  bills,  ex- 
chequer bills,  and  many  other  forms  of  credit,  may  be  called 
money.  While  it  is  a  purely  hnman  device  and  was  adopted 
for  man's  convenience,  it  has  often  seemed  to  master  soci- 
ety and  thwart  its  purposes.  In  its  essence  and  functions 
it  ought  to  be  neither  complicated  nor  mysterious.  The 
basis  of  gold  and  silver  has  been  settled  upon  by  the  com- 
mon consent  of  the  nations,  but  there  are  yet  outstanding 
many  unsettled  questions  :  the  possibility  and  advisability 
of  a  bimetalhc  standard,  the  amount  which  the  exchanges 
of  a  nation  require,  the  relation  of  paper  money  to  coin, 
and  the  real  nature  of  the  credit  which  paper  currency 
stands  for,  are  sufHciently  nndetermined  to  render  their 
discussion,  even,  at  times  dangerous  to  the  stability  of  trade 
and  finance.  All  of  us  are  familiar  with  the  unaccountable 
phenomena  of  commercial  crises.  Money  may  be  abun- 
dant, enterprises  may  invite  to  effort,  labor  may  be  stand- 
ing waiting  in  its  market,  but  a  pall  hangs  over  societary 


28  PROTECTION    VS.   FREE   TRADE. 

activities.  Credit  has  departed  from  men.  Want  of  con- 
fidence paralyzes  all  industrial  movement.  It  is  a  time  of 
panic,  and  no  science  can  predict  the  future.  Indeed,  sci- 
ence can  not  account  for  the  past.  In  such  crises  vp'e  hear 
much  of  over-production,  under-consumption,  and  under- 
production. It  is  an  idle  jangle  of  words,  and  neither  de- 
scrihes  nor  explains  anything. 

It  would  seem  as  if  some  phases  of  the  money  question 
ought  to  be  settled  by  this  time,  but  controversies  go  on. 
Inasmuch  as  "  money  is  the  current  and  legal  measure  of 
values,"  the  material  of  which  money  itself  is  made  must 
be  a  commodity  having  value.  The  only  real  dollar  known 
to  the  commerce  of  the  world  is  the  coin  dollar.  This 
proposition,  however,  is  still  in  dispute. 

But  there  is  another  kind  of  money,  the  paper  dollar — 
the  promise- dollar.  Inasmuch  as  it  is  the  sign  and  not  the 
thing  signified ;  is  "  the  representative  of  something  and 
not  tliat  something  itself,"  the  promise-dollar  ought  always 
to  be  convertible  into  the  real  dollar.  As  a  measure  of 
value  or  of  exchange  the  paper  dollar  must  be  redeemable ; 
redeemable  in  a  real  commodity — also  a  proposition  stiU 
disputed. 

Money  performs  functions  as  a  medium  of  exchange,  a 
measure  of  value,  a  standard  of  value,  and  a  store  of  value. 

"  The  whole  question,"  says  Henry  C.  Carey,  "  and  all 
the  philosophy  of  money  is,  however,  settled  by  the  simple 
proposition,  of  universal  truth,  that  in  the  natural  course  of 
human  affairs  the  prices  of  raw  and  finished  commodities 
tend  to  approximate,  the  former  rising  as  the  latter  fall, 
and  the  rapidity  of  the  change  increasing  with  every  in- 
crease in  the  supply  of  those  tnetals  which  constitute  the 
standard  with  ichich  prices  need  he  compared.  .  .  .  Ap- 
proximation in  the  prices  of  the  raw  material  and  the  fin- 
ished commodity  is  the  one  essential  characteristic  of  civili- 


THE  SCIENCE  OF  POLITICAL  ECONOMY.  29 

zation.  .  .  .  Money  is  the  instrument  of  association — tlie 
cause  of  motion  and  power  in  a  society." 

As  accounting  for  mucli  of  the  want  and  misery  in  the 
world  the  orthodox  economist,  in  some  form  or  other, 
makes  use  of  Dr.  Malthus's  "  Tlieory  of  Popuhition."  In 
this  way  he  undertakes  to  give  the  reasons  why,  in  the  case 
of  so  many  milhons  of  the  human  race,  "effort"  is  not  re- 
warded by  "  satisfaction."  The  Malthusian  tlieory  is  this : 
"  According  to  the  principle  of  population,  the  human  race 
has  a  tendency  to  increase  faster  than  food.  It  has,  there- 
fore, a  constant  tendency  to  people  a  country  fully  up  to 
the  limits  of  subsistence ;  meaning  by  those  limits  the  low- 
est quantity  of  food  which  will  maintain  a  stationary  popu- 
lation." 

Mr.  McCulloch  thinks  that  "  the  power  of  increase  in 
the  human  species  must  always  in  the  long  run  prove  an 
ovei'match  for  the  increase  in  the  means  of  subsistence." 
Mr.  Mill's  statement  is  that  "  the  tendency  of  population 
to  increase  in  most  places  faster  than  capital  is  proved  in- 
contestably  by  the  condition  of  the  population  in  most 
parts  of  the  globe."  This  tendency  to  increase  in  popula- 
tion can  be  only  held  in  check  by  moral  self-restraint  or  by 
the  scourges  of  famine,  pestilence,  and  war.  The  doctrine 
has  been  made  to  play  a  decisive  part  in  some  of  the  specu- 
lations of  famous  writers.  Prof.  Perry  dismisses  it  thus  : 
"  Malthusianism,  as  it  has  been  called,  is  really  a  topic  of 
physiology  and  not  of  political  economy  at  all.  Political 
economy  presupposes  the  existence  of  persons  able  and  will- 
ing to  make  exchanges  before  it  begins  its  inquiries  and 
generalizations.  How  they  come  into  existence,  the  rate  of 
their  natui'al  increase,  and  the  relation  of  this  increase  to 
food,  however  interesting  as  physiological  questions,  have 
clearly  nothing  to  do  with  our  science."  But  in  the  mat- 
ter of  "  exchanges,"  we  shall  find  that  the  wages  question, 


30  PROTECTION    VS.   FREE   TRADE. 

as  related  to  tlie  demand  and  supply  of  labor,  and  the  dis- 
tinction between  labor  and  the  laborer,  liave  something  to 
do  with  our  science. 

What  is  called  the  wages-fund  theory  has  been  made  an 
important  part  in  the  process  of  production  and  distribu- 
tion. Adam  Smith  had  laid  down,  as  quite  fundamental, 
this  proposition :  "  The  general  industry  of  the  society 
never  can  exceed  what  the  capital  of  the  society  can  em- 
ploy. As  the  number  of  workmen  that  can  be  kept  in  em- 
ployment by  any  particular  person  must  bear  a  certain  pro- 
portion to  his  capital,  so  the  number  of  those  that  can  be 
contiQually  employed  by  all  the  members  of  a  great  society 
must  bear  a  certain  proportion  to  the  whole  capital  of  that 
society,  and  can  never  exceed  that  portion."  In  Smith's 
discussion,  this  is  one  of  the  pillars  of  his  free-trade  sys- 
tem. We  shall  see  later  on  the  essential  vice  of  this  state- 
ment as  a  statement  of  fact.  It  is  not  true  that  industry  is 
hmited  by  capital,  and,  as  a  matter  of  fact,  there  has  never 
been  any  limitation  on  the  em^ployment  of  labor  by  reason 
of  lack  of  capital.  It  is  one  mode  of  formulating  the 
wages-fund  theory. 

Mr.  Mill  states  that  theory  in  these  words  :  "  There  is 
supposed  to  be  at  any  instant  a  sum  of  wealth  which  is  un- 
conditionally devoted  to  the  payment  of  wages.  This  sum 
is  not  regarded  as  unalterable,  for  it  is  augmented  by 
saving  and  increasing  with  the  progress  of  wealth ;  but  it 
is  reasoned  upon  as  at  any  given  moment  a  predetermined 
amount.  More  than  that  amount  it  is  assumed  that  the 
wages-receiving  class  can  not  possibly  divide  among  them ; 
that  amount,  and  no  less,  they  can  not  but  obtain.  So  that, 
the  sum  to  be  divided  being  fixed,  the  wages  of  each  de- 
pend solely  on  the  divisor,  the  number  of  participants." 
In  other  words,  the  quotient,  wages,  would  be  increased  in 
the  ratio  in  which  the  divisor,  laborers,  were  decreased. 


THE   SCIENCE   OF  POLITICAL   ECONOMY.  31 

Now,  it  is  still  a  disputed  question  wlietlier  wages  arc  paid 
out  of  capital  at  all ;  whether  the  laborer  does  not  advance 
his  labor  to  the  capitalist.  Under  the  attack  of  Mr.  Thorn- 
ton, Mill  himself  abandoned  the  wages-f and  theory.  Prof. 
Walker  and  Mr.  Longe  both  repudiate  it.  Prof.  Cairnes, 
even  after  Mill's  defection,  returns  to  its  defense.  Prof. 
Perry  holds  to  a  form  of  it,  somewhat  modified.  Some  of 
them  seem  to  think  that  in  some  way  or  other  the  doctrine 
pf  free  trade  could  be  best  maintained  on  the  assumption 
of  the  truth  of  the  theory. 

Prof.  Jevons  thus  disposes  of  this  question  :  "  There  is 
another  inversion  of  the  problem  of  economics  which  is 
generally  made  in  works  upon  the  subject.  Although 
labor  is  the  starting-point  in  production,  and  the  interests 
of  the  laborer  the  very  subject  of  the  science,  yet  econo- 
mists do  not  progress  far  before  they  suddenly  turn  around 
and  treat  labor  as  a  commodity  which  is  bought  up  by  capi- 
talists. Labor  becomes  itself  the  object  of  the  laws  of 
supply  and  demand,  instead  of  those  laws  acting  in  the 
distribution  of  the  products  of  labor.  Economists  have 
invented,  too,  a  very  simple  theory  to  determine  the  rate 
at  which  capital  can  buy  up  labor.  The  average  rate  of 
wages,  they  say,  is  found  by  dividing  the  whole  amount  of 
capital  appropriated  to  the  payment  of  wages  by  the  num- 
ber of  the  laborers  paid ;  and  they  wish  us  to  believe  that 
this  settles  the  question.  But  a  little  consideration  shows 
that  this  proposition  is  simply  a  truism.  The  average  rate 
of  wages  must  be  equal  to  what  is  appropriated  to  the  pur- 
pose, divided  by  the  number  who  share  it.  The  whole 
question  will  consist  in  determining  how  much  is  appro- 
priated for  the  pui-pose ;  for  it  certainly  need  not  be  the 
whole  existing  amount  of  circulating  capital.  Mill  dis- 
tinctly says  that  because  industry  is  limited  by  capital  we 
are  not  to  infer  that  it  always  reaches  that  limit ;  and,  as  a 


32  PROTECTIOX    VS.  FKEE  TRADE. 

matter  of  fact,  we  often  observe  that  there  is  abundance 
of  capital  to  be  had  at  low  rates  of  interest,  while  there 
are  also  large  numbers  of  artisans  starving  for  want  of 
employment.  The  wages-fund  theory  is,  therefore,  illusory 
as  a  real  solution  of  the  problem," 

"  Another  part  of  the  current  doctrines  of  economics 
determines  the  rate  of  profit  of  capitalists  in  a  very  sim- 
ple manner.  The  whole  produce  of  industry  must  be  di- 
vided into  the  portions  paid  to  rent,  taxes,  profits,  and 
wages.  ,  .  .  Eliminating  rent  and  taxes  as  exceptional,  we 
thus  ai'rive  at  the  simple  equation — 

Produce  =  jjrofit  -j-  wages. 
A  plain  result  also  is  drawn  from  the  formula ;  for  we  are 
told  that  if  wages  rise,  profits  must  fall,  and  vice  versa. 
But  such  a  doctrine  is  radically  fallacious :  it  involves  the 
attempt  to  determine  two  unknown  quantities  from  one 
equation.  I  grant  that,  if  the  produce  be  a  fixed  amount, 
then,  if  wages  rise  profits  must  fall,  and  vice  versa.  Some- 
thing might  perhaps  be  made  of  this  doctrine  if  Kicardo's 
theory  of  a  natural  rate  of  wages — ^that  which  is  just  suf- 
ficient to  support  the  laborer — held  true.  But  I  altogether 
question  the  existence  of  any  such  rate." 

"  The  view  which  I  accept  concerning  the  rate  of  wages 
is  not  more  difficult  to  comprehend  than  the  current  one. 
It  is  that  the  wages  of  a  working-man  are  ultimately  coin- 
cident with  what  he  produces,  after  the  deduction  of  rent, 
taxes,  and  the  interest  of  capital.  I  think  that,  in  the 
equation — 

Produce  =  profit  -\-  wages, 

the  quantity  of  produce  is  essentially  variable."  Prof. 
Walker  agrees  to  this,  and  thinks  from  the  total  produce 
is  first  deducted  rent,  then  interest,  then  profits,  and  that 
"  labor  is  the  residual  claimant  to  the  product  of  industry." 
We  have  now  the  clew  as  to  the  amount  of  capital 


THE   SCIENCE   OF  TOLITICAL  ECONOMY.  33 

which  will  be  appropriated  to  the  pa^nnent  of  wages  in 
any  trade :  "The  amount  of  capital  will  depend  upon  the 
amount  of  anticipated  profits,  and  the  competition  to  ob- 
tain proper  workmen  will  strongly  tend  to  secure  to  the 
latter  all  their  legitimate  share  in  the  ultimate  produce." 

"  The  fact  is  that  labor  once  spent  has  no  influence  on 
the  future  value  of  any  article ;  it  is  gone  and  lost  forever. 
In  commerce,  by-gones  are  forever  by-gones,  and  we  are 
always  starting  clear  at  each  moment,  judging  the  values 
of  things  with  a  view  to  future  utility.  Industry  is  essen- 
tially prospective,  not  retrospective,  and  seldom  does  the 
result  of  any  undertaking  exactly  coincide  with  the  first 
intention  of  its  promoters."  Mr.  Carey's  theorem  was 
that  "  value  depends  on  the  cost  of  reproduction." 

We  now  have  a  sketch  of  the  mechanism  of  the  indus- 
trial organism.  Wq  see  how  the  economic  man  tends  to 
behave.  Unfortunately  for  the  scientific  value  of  the  con- 
clusions to  be  drawn,  we  have  little  more  than  tendencies, 
and  all  along  there  are  occasions  for  "  allowances,"  "  cor- 
rections," "friction,"  and  "disturbing  elementa." 


CHAPTER  III. 

THE   MOTIVE   TO    PKODTTCTION THE   ECONOMIC   MAN. 

We,  following  the  economist,  turn  then  to  the  motive 
power  of  this  mechanism.  We  are  to  ex]3lore  the  mental 
characteristics  of  the  man  who  is  to  put  it  all  in  motion. 
We  turn  from  the  external  world  to  mental  phenomena — 
the  behavior  of  a  being  having  desires,  intellectual  and 
moral  capabilities,  and  will.  From  this  point  forward  the 
data  of  investigation  are  psychical.  They  are  in  the  field 
of  moral  science,  and  not  in  the  region  of  things — external 
objects.  The  method  is  a  metaphysical  one.  The  validity 
of  our  results  depends  on  deductions — conclusions  reached 
by  an  a  priori  process.  The  consequences  will  be  as  might 
be  expected.  We  shall  find  no  realities  in  the  world  to 
correspond  with  the  abstraction  from  which  we  start  out. 
The  underlying  motive  has  been  described  by  different 
writers  from  different  points  of  view.  Adam  Smith,  it 
may  readily  be  conceded,  attempted  the  first  systematical 
explanation  of  the  phenomena  of  an  industrial  and  com- 
mercial society.  Most  wi-iters  in  England  since  his  day 
have  endeavored  to  unfold  more  accurately  his  ideas.  Of 
these  writers,  one  of  his  most  learned  and  distinguished 
disciples  has  approvingly  said  :  "  They  have  not  hesitated 
to  cut  and  carve,  and  apply  the  caustic  until  there  is 
scarcely  an  important  passage  in  the  whole  work  which 
some  one  of  his  friends  has  not  detached  from  his  system 
as  wrong,  or  branded  as  absurd."     In  his  theory  of  wealth, 


THE   MOTIVE   TO   TRODUCTION.  35 

man  is  considered  as  actuated  solely  by  Selfisliness ;  in 
bis  tbeory  of  morals,  be  is  considered  as  actuated  by  Sym- 
patby.  Among  tbc  premises  of  bis  work  are  tbesc : 
"  Men  are  prompted  to  expend  by  tbe  desire  of  present 
enjoyment — a  passion  only  momentary  and  occasional. 
Tbey  are  prompted  to  save  by  tbe  desire  of  bettering  tbeir 
condition — a  passion  wbicb  comes  witb  tbem  from  tbe 
womb,  and  never  leaves  tbem  till  tbey  go  to  tbe  grave.  .  .  . 
Tbe  principle  exciting  to  frugality,  tbe  uniform,  con- 
stant, and  uninterrupted  effort  of  every  man  to  better  bis 
condition,  produces  botb  public  and  national  as  well  as  pri- 
vate opulence,  and  is  frequently  more  tban  sufficiently 
powerful  to  counteract  tbe  extravagance  of  government 
and  tbe  greatest  errors  of  administration.  .  .  .  Alone  and 
witbout  any  assistance  it  is  capable,  not  only  of  carrying 
on  tbe  society  to  wealtb  and  prosperity,  but  of  surmounting 
a  bundred  impertinent  obstructions  witb  wbicb  tbe  folly  of 
buman  laws  too  often  encumber  its  operations."  In  tbese 
passages  we  come  upon  tbe  doctrine  of  laissez  faire, 
wbicb  it  bas  been  attempted  to  erect  into  a  scientific  j)rin- 
ciple,  on  tbe  assumption  tbat  tbe  individual  knows  bis 
own  interests  in  tbe  sense  in  wbicb  tliey  are  identical  witb 
tbe  interests  of  society.  Tbis  principle  and  tbis  assump- 
tion will  engage  our  attention  furtber  on.  We  return  to 
our  motive  powers.  M.  Rossi  groups  tbem  in  tbis  wise  : 
"  Om'  power  over  tbings  by  means  of  labor ;  our  inclina- 
tion to  saving  if  a  sufficient  interest  stimulates  us ;  our  in- 
clinations to  unite  our  exertions  for  a  common  purpose; 
our  instincts  of  property,  and  of  excbange  or  trade.  Tbese 
are  tbe  facts  of  every  time  and  of  every  place ;  tbese  are 
tbe  general  facts  of  political  economy."  Tbis  is  a  mucb 
more  satisfactory  generalization.  It  puts  more  flesb  and 
blood  upon  tbe  skeleton,  wbicb  most  economists  start  witb 
as  tbeir  "  economic  man." 


36  PEOTECTION    VS.  FEEE  TRADE. 

Mr.  Mill,  in  liis  essay  on  "  Unsettled  Questions  in  Politi- 
cal Economy,"  has  once  for  all  determined,  for  tlie  English 
school,  the  method  of  the  science,  and  defined  the  economic 
man  with  which  it  deals.  The  revolt  against  his  abstract 
science  and  its  a  priori  method  is  now  well-nigh  universal. 
He   says  : 

"  What  is  now  commonly  understood  by  the  term  '  po- 
litical economy'  is  not  the  science  of  speculative  politics, 
but  a  branch  of  that  science.  It  does  not  treat  of  the  whole 
of  man'^s  nature  as  modified  by  the  social  state,  nor  the  whole 
conduct  of  man  in  society.  It  is  concerned  with  him  solely 
as  a  being  who  desires  to  jiossess  wealth,  and  who  is  capable 
of  judging  of  the  comparative  efficacy  of  means  for  obtain- 
ing that  end.  It  predicts  only  such  of  the  phenomena  of  the 
social  state  as  take  place  in  consequence  of  the  pursuit  of 
wealth.  It  makes  entire  abstraction  of  every  other  human 
passion  or  motive,  except  those  which  may  be  regarded  as 
perpetually  antagonizing  principles  to  the  desire  of  wealth, 
namely,  aversion  to  labor  and  desire  of  the  present  enjoy- 
ment of  costly  indulgences.  These  it  takes,  to  a  certain  ex- 
tent, into  its  calculations,  because  these  do  not  merely,  like 
others  and  occasionally,  conflict  with  the  pursuit  of  wealth, 
but  accompany  it  always  as  a  drag  or  impediment,  and  are 
therefore  inseparably  mixed  up  in  the  consideration  of  it. 
Political  economy  considers  mankind  as  occupied  solely  in 
acquiring  and  consuming  wealth.  Under  the  influence  of 
this  desire,  it  shows  mankind  accumulating  wealth,  and  em- 
ploying that  wealth  in  the  production  of  other  wealth.  Sanc- 
tioning, by  mutual  agreement,  the  institution  of  property  ; 
establishing  laws  to  prevent  individuals  from  encroaching  upon 
the  property  of  others  by  force  or  fraud  ;  adopting  various 
contrivances  for  increasing  the  productiveness  of  this  labor  ; 
setting  the  division  of  produce  by  agreement,  under  the  in- 
fluence of  competition  (competition  itself  being  governed  by 
certain  laws,  which  laws  are  therefore  the  regulators  of  the 


THE  MOTIVE  TO  PRODUCTION.  37 

division  of  produce)  ;  and  employing  certain  expedients  (as 
money,  credit,  etc.)  to  facilitate  tlie  distribution.  .  .  .  The 
science  then  proceeds  to  investigate  the  laws  which  govern 
these  several  operations,  under  the  supposition  that  man  is  a 
being  who  is  determined,  by  the  necessity  of  his  nature,  to  pre- 
fer a  greater  portion  of  wealth  to  a  smaller  in  all  cases,  with- 
out any  other  exception  than  that  constituted  by  the  two  coun- 
ter-motives already  specified.  N^ot  that  any  political  econo- 
mist teas  ever  so  absurd  as  to  suppose  that  mankind  are  really 
thus  constituted,  but  because  this  is  the  mode  in  which  science 
must  necessarily  proceed.  .  .  .  The  manner  in  which  it  ne- 
cessarily proceeds  is  that  of  treating  the  main  and  acknowl- 
edged end  as  ^yit  was  the  sole  end,  which,  of  all  hypotheses 
equally  simple,  is  neai'est  the  truth.  ...  In  this  way  a 
nearer  approximation  is  obtained  than  would  otherwise  be 
practicable  to  the  real  order  of  human  affairs  in  those  de- 
partments. This  approximation  is,  then,  to  be  corrected  by 
making  proper  allowance  for  the  effects  of  any  impulses  of  a 
different  description.  .  .  .  The  conclusions  of  political  econo- 
my, consequently,  are  only  true,  as  the  common  phrase  is,  in 
the  abstract.  .  .  .  All  that  is  requisite  is  that  the  political 
economist  be  on  his  guard  not  to  ascribe  to  conclusions 
which  are  grounded  upon  an  hypothesis  a  different  kind  of 
certainty  from  that  which  really  belongs  to  them.  .  .  .  That 
which  is  true  in  the  abstract  is  always  true  in  the  concrete, 
with  proper  alloxoances.  When  a  certain  cause  really  exists, 
and,  if  left  to  itself,  would  infallibly  produce  a  certain  effect, 
that  same  effect,  modified  by  all  the  other  concurrent  causes, 
will  correctly  correspond  to  the  result  really  produced." 

This  is  the  "  orthodox "  statement  of  the  case.  We 
shall  find  that  when  the  "  allowances  "  and  "  modifications  " 
are  properly  made,  we  have  passed  into  entirely  different 
premises.  Even  though  the  premises  were  trne  and  the 
reasoning  correct,  the  conclusion  is  inadequate  and  utterly 
useless.     "A  bone  fairly  enough  represents  the  sort  of 


38  PROTECTION    VS.  FREE  TRADE. 

wealtli  coveted  by  a  dog,  who  has  a  compai-atively  simple 
cerebral  system,  and  few  other  objects.  Yet  you  can  not 
predict  the  conduct  even  of  a  dog  from  his  love  of  bones, 
or  not  one  would  be  left  in  the  butchers'  shops.  The  dog 
has  a  regard  for  his  master  and  a  fear  of  the  police,  and  he 
has  other  pm'suits." 

According  to  Prof.  Senior,  the  general  facts  on  which 
the  science  of  political  economy  rests  are  comprised  in  these 
four  general  propositions : 

"  1.  That  every  man  desires  to  obtain  additional  wealth 
with  as  little  sacrifice  as  possible." 

This  is  a  matter  of  consciousness.  It  is  the  motor  which 
instigates  human  activity.  It  takes  effect  subject  to  the 
conditions  imposed  by  these  facts  : 

"  2.  That  the  population  of  the  world,  or,  in  other 
words,  the  number  of  persons  inhabiting  it,  is  limited  only 
by  moral  or  physical  evil,  or  by  fear  of  a  deficiency  of  those 
articles  of  wealth  which  the  habits  of  the  individuals  of 
each  class  of  its  inhabitants  lead  them  to  require. 

"  3.  That  the  powers  of  labor  and  of  other  instruments 
which  produce  wealth  may  be  indefinitely  increased  by 
using  their  products  as  the  means  of  further  production. 

"  4.  That,  agricultural  skill  remaining  the  same,  addi- 
tional labor  employed  on  the  land,  within  a  given  district, 
produces  in  general  a  less  proportionate  return  ;  or,  in 
other  words,  that  though,  with  every  increase  of  the  labor 
bestowed,  the  aggregate  retm-n  is  increased,  the  increase 
of  the  return  is  not  in  proportion  to  the  increase  of  the 
labor." 

These  facts  are  matters  of  observation. 

The  second  is  "  the  Malthusian  law  of  population." 

The  third  is  made  available  by  the  "  effective  desire  of 
accumulation  " — ^present  saving  with  the  pui-pose  of  future 
enjoyment. 


THE   MOTIVE   TO  TRODUOTION.  39 

The  fourth  is  "  the  law  of  diminishing  returns.'" 

Prof.  Senior  goes  on,  and  sajs  of  the  desire  for  distinc- 
tion, that  it  is  "  a  feeling  which,  if  we  consider  its  universal- 
ity and  its  constancy,  that  it  affects  all  men  and  at  all  times, 
that  it  comes  with  us  from  the  cradle  and  never  leaves  us  un- 
til we  go  into  the  grave,  may  be  pronounced  to  be  the  most 
powerful  of  human  passions."  lie  thus  subordinates  wealth 
to  the  desire  for  distinction.  lie  adds,  as  if  conscious  of 
an  undue  limitation  of  the  motive  force  behind  human  be- 
ings, under  all  conditions  and  in  all  states  of  progress : 
"  the  nature  and  urgency  of  each  individual's  wants  are  as 
various  as  the  differences  in  individual  character.  Some 
may  wish  for  power,  others  for  distinction,  and  others  for 
leisure ;  some  require  bodily  and  others  mental  amusement ; 
some  are  anxious  to  produce  important  advantage  to  the 
public ;  and  there  are  few,  perhaps  there  are  none,  who,  if 
it  could  be  done  by  a  wish,  would  not  benefit  their  acquaint- 
ances aud  friends.  Money  seems  to  be  the  only  object  for 
which  the  desire  is  universal,  and  it  is  so  because  money  is 
abstract  wealth.  Its  possessor  may  satisfy  at  will  his  am- 
bition, or  vanity,  or  indolence,  his  public  spirit  or  his  pri- 
vate benevolence." 

He  might  have  added,  further,  that  "the  desire  of 
wealth "  itself  is  only  a  generalized  form  of  an  indefinite 
nmnber  of  more  particular  impulses.     He  continues : 

"  The  proposition  in  question "  (the  desire  to  obtain 
additional  wealth  with  as  little  sacrifice  as  possible),  "  though 
we  are  not  aware  that  any  one  has  thought  that  it  required 
to  be  formally  stated,  is  assumed  in  almost  every  process 
of  economical  reasoning.  It  is  the  corner-stone  of  the  doc- 
trine of  wages  and  profits,  and,  generally  speaking,  of 
exchange.  In  short,  it  is  in  poHtical  economy  what  grav- 
itation is  in  physics,  or  the  dictum  de  omni  et  nullo  in 
logic  :  the  ultimate  fact,  beyond  which  reasoning  can  not 


40  PROTECTION    VS.  FREE  TRADE. 

go,  and  of  wliicli  almost  every  otlier  proposition  is  merely 
an  illustration." 

Bastiat  surrounds  the  subject  with  his  usual  rhetorical 
success :  "  Political  economy  regards  man  only  in  one  as- 
pect, and  our  first  care  must  be  to  study  man  in  that  point 
of  view.  This  is  the  reason  why  we  can  not  avoid  going 
back  to  the  prhnary  phenomena  of  human  sensibibility  and 
activity.  .  .  .  The  general  idea  of  sensibihty  springs  from 
other  ideas  which  are  more  precise:  pain,  waiit,  desire, 
taste,  ajipetite,  on  one  side,  and,  on  the  other,  pleasure,  en- 
joyment, competence.  Between  these,  his  extremes,  a  mid- 
dle term  is  interposed,  and  from  the  general  idea  of  activity 
spring  the  more  precise  ideas  of  pain,  effort,  fatigue,  labor, 
production.  In  analyzing  sensibility  and  activity  we  en- 
counter a  word  common  to  both — the  word  pain,  .  .  .  This 
advises  us  that  here  below  we  have  only  a  choice  of  evils. 
In  the  aggregate  of  all  these  phenomena,  all  is  personal,  as 
well  the  sensation  which  precedes  the  effort  as  the  satisfac- 
tion which  follows  it. 

"  We  can  not  doubt,  then,  that  personal  interest  is  the 
great  main-spring  of  human  nature." 

Mr.  Henry  Sidgwick,  speaking  of  the  fundamental  as- 
sumption which  economists  make,  says  :  "  The  first  and 
most  fundamental  is  that  all  persons  engaged  in  industry 
will,  in  selling  or  lending  goods,  or  contracting  to  render 
services,  endeavor,  cceteris  paribus,  to  get  as  much  wealth 
as  they  can  in  return  for  the  commodity  they  offer.  This 
is  often  more  briefly  expressed  by  saying  that  political 
economy  assumes  the  universality  and  unUmitedness  of  the 
desire  for  wealth.  Against  this  assumption  it  has  been 
urged  that  men  do  not,  for  the  most  part,  desire  wealth  in 
general,  but  this  or  that  particular  kind  of  wealth  ;  in  fact, 
that  '  the  desire  of  wealth  is  an  abstraction  compounding  a 
great  variety  of  different  and  heterogeneous  motives  which 


THE  MOTIVE  TO  PRODUCTION.  41 

have  been  mistaken  for  a  single  homogeneous  force.'.  .  . 
At  the  same  time,  it  is  equally  tnie  that  there  are  other 
things  obtainable  by  labor  besides  wealth,  which  mankind 
generally  if  not  universally  desire,  such  as  power  and  repu- 
tation ;  and  it  is  further  undeniable  that  men  are  largely 
induced  to  render  services  of  various  kinds  by  family  affec- 
tion, friendship,  compassion,  national  and  local  patriotism, 
and  other  kinds  of  esprit  de  corps  and  other  motives.  The 
amount  of  unpaid  work  that  is  done  from  such  motives,  in 
modem  civilized  society,  forms  a  substantial  part  of  the 
whole,  and  political  economists  are  perhaps  fairly  charge- 
able with  an  omission  in  making  no  express  reference  to 
such  work — with  the  exception  of  the  mutual  services  ren- 
dered by  husbands  and  wives  and  by  parents  and  children." 
Prof.  Perry  does  make  "express  reference"  to  these 
motives  and  the  exchanges  gro"s\'ing  out  of  them.  He 
sweeps  them  completely  out  of  the  field  of  the  science  of 
political  economy.  Having  found  the  word  "  wealth "  a 
veritable  "slough  of  despond,"  he  dropped  it  as  both  a 
useless  and  a  confusing  temi.  After  the  manner  of  Bas- 
tiat,  he  deals  with  om*  "  desires  "  and  their  "  satisfactions." 
"  The  desu'es  of  men  are  not  only  various  in  kind  and  in- 
definite in  degree,  but  also  tend  to  increase  in  variety  and 
extent  by  the  progress  of  knowledge  and  freedom.  To  the 
gratifi:cation  of  almost  all  these  desires,  however,  there  are 
obstacles  interposed,  some  of  which  are  physical  and  some 
moral;  and  these  obstacles  are  so  great,  in  all  directions, 
that  the  powers  of  the  individual  man  are  utterly  incompe- 
tent to  surmount  them.  They  mock  at  his  weakness  and 
throw  him  back  upon  his  destitution.  Without  association 
with  his  fellow-men  there  is  no  creature  so  helpless,  so  un- 
able to  reach  his  true  end,  as  is  man ;  and  therefore  it  is 
that  the  impulse  to  association  is  one  of  the  strongest  im- 
pulses of  our  nature.     Men  come  together,  as  it  were,  hy 


42  PROTECTION    VS.  FREE  TRADE. 

instinct,  into  society.  And  associating  together  in  a  socie- 
ty, it  is  very  soon  discovered,  not  only  that  there  are  vari- 
ous desires  in  tlie  different  members  of  the  commnnity 
which  are  now  readily  met  by  co-operation  and  mutual 
exchange,  but  also  that  there  are  very  different  powers  in 
the  different  individuals  in  relation  to  those  obstacles  which 
are  to  be  surmounted."  As  a  circumlocution  for  getting, 
not  "  wealth "  but  "  satisfaction  of  desires,"  at  the  least 
possible  sacrifice,  he  quotes  approvingly,  as  the  unyielding 
iron  law  of  our  nature,  under  which  we  are  impelled,  the 
words  of  President  John  Bascom :  "  Between  one  dollar 
and  two  dollars  a  man  has  no  choice,  he  must  take  the 
greater ;  between  one  day  and  two  days  of  labor,  he  must 
take  the  less ;  between  the  present  and  the  future,  he  must 
take  the  present.  This  is  not  a  sphere  of  caprice,  nor 
scarcely  even  of  liberty ;  the  actions  themselves  ]3resent  no 
alternative." 

Henry  C.  Carey  seized  upon  the  "  impulse  to  associa- 
tion "  (which  Prof.  Perry  denominates  as  one  of  the  strong- 
est impulses  of  our  nature)  as  the  strongest  impulse  of  our 
nature.  The  whole  scheme  of  human  "  exchanges  "  grew 
out  of  this  "  association,"  and  not  the  "  association  "  out  of 
the  "  exchanges."  Mr.  Carey  undertook  to  show  that  the 
United  States,  one  of  the  "  societies,"  one  of  the  "  commu- 
nities "  to  which  Prof.  Perry  alludes — the  nation — was  suf- 
ficiently large  in  the  extent  of  its  tenitory,  the  variety  of 
its  soil  and  its  climate,  in  the  mountains  to  be  pierced,  in 
its  rivers  to  be  bridged,  in  its  forests  to  be  leveled,  in  its 
fields  to  be  made  fertile,  in  its  mines  to  be  opened,  in  its 
useful  products  to  come  into  existence,  in  the  scope  of  the 
moral  and  intellectual  talents  of  its  population,  in  its  ca- 
pacity for  the  minutest  division  of  employments  and  its 
skill  in  mechanism,  and  in  the  vast  variety  of  the  desires, 
satisfactions,  and  aspirations  which  its  people  could  and 


THE  MOTIVE  TO  PRODUCTIOX.  43 

must  pro\ade  for  and  gratify,  to  afford  tlie  very  higliest 
illustration  of  the  power  of  association,  oxi^  in  its  highest 
degree,  which  had  been  yet  seen  on  the  earth.'  They  sep- 
arated on  a  question  of  fact,  and  not  on  a  dogma  of  science. 
At  the  point  where  they  separated,  neither  of  them  was 
within  the  limits  of  the  Held  of  pohtical  economy,  as  de- 
fined by  the  English  school  and  Prof.  Perry. 

Prof.  Francis  A.  Walker,  after  quoting  Jolm  Stuart 
Mill's  description  of  his  "  abstract "  man,  goes  on  and  adds : 

"  We  have  here  all  the  elements  of  the  economic  man. 
He  is  taken  as  a  being  perfectly  capable  of  judging  of  the 
comparative  efficacy  of  means  to  the  end  of  wealth.  That 
is,  he  will  never  fail,  wherever  he  may  be,  or  wherever  he 
may  live,  whether  capitalist  or  laborer,  rich  or  poor, 
taught  or  untaught,  to  know  exactly  what  course  will 
secure  his  highest  economic  interest,  that  is,  bring  him  the 
largest  amount  of  wealth." 

Of  course,  we  know  that  this  is  not  true,  at  all,  to  the 
facts,  in  the  conduct  of  the  actual  man. 

"  Moreover,  that  end  of  wealth  he  never  fails  to  desire 
with  a  steady,  uniform,  constant  passion.  Of  every  other 
human  passion  or  motive,  political  economy  makes  entire 
abstraction ;  love  of  country,  love  of  honor,  love  of  friends, 
love  of  learning,  love  of  art,  pity,  honor,  shame,  religion, 
charity,  will  never,  so  far  as  political  economy  cares  to  take 
account,  withstand  in  the  slightest  degree,  or  for  the  shortest 
time,  the  effort  of  the  economic  man  to  amass  wealth.  .  .  . 
There  are,  however,  two  human  passions  and  motives,  of 
which  political  economy  takes  account  as  perpetually  an- 
tagonizing principles  to  the  desire  of  wealth,  namely,  aver- 
sion to  labor  and  desire  of  the  present  enjoyment  of  costly 
indulgence ;  that  is,  indolence  and  gluttony."' 

*  The  census  of  18S0  has  given  the  most  complete  proof  of  causes  r.nd 
their  effects. 


44  PROTECTION    VS.  FREE  TRADE. 

Frederic  Bastiat  starts  out  with  tlie  proposition,  "  The 
subject  of  political  economy  is  man."  He  at  once  proceeds 
to  divest  his  science  of  human  interest  by  eviscerating  it 
after  this  fashion :  "  But  it  does  not  embrace  the  whole 
range  of  human  affairs.  The  science  of  morals  has  appro- 
priated all  that  comes  within  the  attractive  regions  of  sym- 
pathy— the  religious  sentiments,  paternal  and  maternal 
kindness,  filial  piety,  love,  friendship,  patriotism,  charity, 
pohteness.  To  political  economy  is  only  left  the  cold 
domain  of  personal  interest.  Dispute  its  right  to  exist  as 
a  science,  but  don't  force  it  to  counterfeit  what  it  is  not 
and  can  not  be." 

Of  this  economic  man  Mr.  Carey  had  said :  "  Modern 
political  economy  has  made  for  itself  a  being  which  it 
denominated  man,  from  whose  composition  it  excluded  all 
those  parts  of  the  ordinary  man  that  are  common  to  him 
and  the  angels,  retaining  carefully  all  those  common  to 
him  and  the  beast  of  the  forest.  It  has  been  forced  to  ex- 
clude from  its  definition  of  wealth  all  that  pertains  to  the 
feelings,  the  affections,  and  the  intellect.  It  sees  nothing 
but  material  things." 

His  own  definition  of  "  wealth  "  is  "  the  power  to  com- 
mand the  ever-gratuitous  force  of  nature." 

This  definition  is  the  logical  basis  of  the  system  of 
Carey,  Bastiat,  and  Perry — though  the  latter  sometimes 
calls  wealth  property.  It  contains  the  germs  of  a  really 
philosophical  system  of  social  science,  but  out  of  this  sys- 
tem Prof.  Perry  has  cut  a  thin  shce — so  much  only  as  is 
included  in  the  operation  of  "  a  sale "  or  "  an  exchange." 
In  the  last  edition  of  his  "  Political  Economy,"  issued  in 
1 883,  he  seems  to  have  reached  what  he  deems  solid  ground, 
lie  seems  to  have  found  satisfactory  answers  to  the  ques- 
tions which  he  says  he  has  been  for  thirty  years,  "  and  in- 
creasingly as  the  years  went  by,"  asking  himseK :  "  What 


THE   MOTIVE   TO   TRODUCTION.  45 

is  political  economy  about  ?  "Within  what  precise  field  do 
its  inquiries  he  ?  Is  it  possible  clearly  and  simj)ly  to  cir- 
cumscribe that  field  ? " 

In  the  process  of  answering  these  questions  he  has 
developed  his  view  of  pohtical  economy,  as  he  defines  it, 
with  great  clearness  and  simplicity.  Adopting  the  lan- 
guage he  applies  to  one  of  his  predecessors,  he  shows  him- 
self to  be  "original,  over-confident,  sometimes  careless, 
controversial,  exasperating,  almost  belligerent,  and  always 
indefatigable."  While  we  can  not  help  admiring  his  dia- 
lectic push,  there  are  many  wide  and  impassable  gajjs  be- 
tween his  premises  and  his  conclusions.  We  shall  therefore 
look  carefully  and  somewhat  in  detail  into  them.  We  have 
already  given  his  definition.  Political  economy  is  the 
science  of  sales  or  exchanges.  "  Anything  whatsoever  that 
is  salable  or  can  be  made  so  comes  within  its  view,  and 
scientifically  it  cares  nothing  whatever  for  anything  else. 
.  .  .  Before  anything  is  sold,  or  is  being  ready  to  sell,  it 
cares  not  what  other  science  employs  itself  on  that  thing ; 
after  the  thing  is  sold,  economy  loses  its  interest  in  it,  and 
other  sciences  may  take  it  up,  if  they  choose.  Salahleness 
is  the  one  quahty  that  constitutes  the  class  of  things  with 
which  the  science  is  conversant,  and  it  claims  complete 
jurisdiction  over  all  things  just  as  far  forth  as  they  have 
this  quality,  and  no  further." 

The  exclusions  thus  made  at  the  threshold  he  thinks 
entitle  him  to  make  this  criticism :  "  They  show  that  the 
leaders  of  the  second  school"  (including,  as  he  classifies 
them,  Adam  Smith,  Ricardo,  Senior,  and  Mill)  "  are  incon- 
sistent with  themselves  in  their  general  conceptions  of  the 
subject-matter  of  the  science.  They  begin  nowhere.  They 
have  no  steady  class  of  facts  to  deal  with.  They  have,  in- 
deed, demonstrated  many  important  truths,  and  they  have 
done  excellent  practical  service  for  mankind,  but  in  the 


46  PROTECTION    VS.  FREE  TRADE. 

entirety  of  their  scientific  work  we  can  take  but  little  satis- 
faction. It  is  on  account  of  tkis  comparative  failure  in 
their  scientific  outset  that  the  second  school  have  declined 
in  influence  and  are  now  likely  to  be  superseded."  With 
his  own  "  outset "  he  thinks  a  true  and  lasting  science  may 
be  obtained,  "  provided  only  the  next  right  steps  be  taken  " 
also.  Where  do  the  school  of  Prof.  Perry  begin  ?  What  is 
their  "  scientific  outset  "  ?  What  is  their  "  next  step "  ? 
They  simply  throw  overboard,  at  once,  the  word  "  wealth  " 
as  incapable  of  any  definition  for  scientific  use.  The  mo- 
tive power  of  the  elder  economists — the  desire  of  every 
man  to  obtain  additional  wealth  with  as  little  sacrifice  as 
possible — is  moved  further  back,  is  sunk  in  the  wider  gen- 
eralization, "satisfaction  of  desires."  We  shall  see  what 
success  attends  this  legitimate  change  of  base.  It  renders 
the  science  more  human,  but  introduces  many  elements 
besides  economic  gains. 

Again :  "  There  is  one  word  that  marks  and  circum- 
scribes the  field  of  ethics,  and  that  is  ought.  There  is  one 
word  that  marks  and  circumscribes  the  field  of  economics, 
and  that  word  is  value.  ...  It  favors  honesty  and  morality, 
indeed,  because  they  facilitate  exchanges.  It  puts  the  seal 
of  the  market  upon  all  of  the  virtues.  It  condemns  slavery, 
not  so  much  because  it  is  ethically  wrong,  as  because  it  is 
economically  ruinous.  .  .  .  But  let  us  here  add  once  for 
all  the  grand  truth  that  political  economy  does  not  cover 
the  entire  relations  between  employer  and  employed,  and 
between  buyers  and  sellers  generally ;  it  covers  perfectly 
their  economical  relations,  the  relations  between  buyers 
and  sellers  as  such  /  but  morality  and  religion  have  addi- 
tional, but  not  incompatible,  words  to  utter  when  this 
science  becomes  silent  /  mutual  forbearance  and  concession, 
mutual  afEection  and  helpfulness,  are  duties  enforced  by 
higher  considerations  than  those  of  gain."     True,  indeed, 


THE   MOTIVE   TO   PRODUCTION.  4Y 

the  wliole  scheme  of  societary  co-operation  is  based  on 
these  additional  sanctions. 

The  professor  is  here  at  least  good  enough  to  give  us  a 
human  reality  and  not  a  mere  economist's  "  abstraction  "  to 
deal  with  ;  and  yet  he  falls  into  the  old  rut  of  dealing  with 
only  a  part  of  the  real  man.  We  had  good  reason  to  hope 
that  this  many-sided  man,  with  desires  and  passions  and 
moral  nature  and  a  will,  would,  under  their  operation,  put 
himself,  as  a  whole,  into  an  "  exchange  "  as  he  would  into  any 
other  act,  that  he  would  not  operate  in  sections,  so  to  speak, 
but  would  and  must  act  as  an  integer.  But  we  are  first  to 
find  a  part  of  him  in  the  old,  hopeless,  impracticable  pursuit 
of  "  wealth  "  :  "  In  thus  circumscribing  the  field  of  politi- 
cal economy  and  yielding  ground  that  has  been  sometimes 
claimed  as  falling  within  it,  we  all  the  more  assert  complete 
jurisdiction  over  the  territory  as  thus  defined.  No  other 
possible  science  can  have  anything  to  do  with  the  gaining 
of  property  by  means  of  exchanging.  Theft  is  out  of  the 
question  here ;  so  are  gifts.  It  makes  no  difference  what  a 
man's  motives  may  be  in  buying  and  selling ;  it  makes  no 
difference  what  his  xdtimate  ptirj^oses  may  be  as  to  the  re- 
sults of  his  buying  and  selling,  the  huying  and  selling  vcm^ 
proceed  in  accordance  with  the  principles  of  this  science." 

Inasmuch  as  "  buying  and  selling  "  had  been  going  on 
for  some  centuries  before  this  science  had  been  worked 
out,  one  might  have  thought  that,  logically  and  chronologi- 
cally, it  might  more  properly  have  been  asserted  that  the 
"  principles  of  the  science "  must  proceed  in  accordance 
with  the  "  bujang  and  selling." 

Again :  "  Saint  and  sinner  must  plow  with  the  same 
heifer.  The  laws  of  value  are  absolutely  universal.  One 
man  may  get  rich  for  the  sake  of  making  a  display,  and  an- 
other man  may  get  rich  for  the  sake  of  doing  good ;  but  the 
getting  rich  is  one  and  the  same  process  forever.     As  John 


48  PROTECTION    VS.  FREE   TRADE. 

Bascom  well  says  :  '  Whichever  one  of  a  thousand  motives 
engages  man  in  the  pursuit  of  wealth,  once  in  that  pursuit, 
these  all  conform  to  one  method  and  acknowledge  one  law.' 
.  .  .  Whatever  others  have  done,  therefore,  or  may  here- 
after undertake  to  do,  we  propose  solely  to  investigate  the 
motives  and  the  conditions  that  govern  men  in  their  ex- 
changes." But  it  had  just  been  said  by  our  author  that 
"  it  makes  no  difference  what  a  man's  motives  may  be  in 
buying  and  selling." 

We  are  remanded,  then,  to  "  the  conditions  "  that  gov- 
ern men  in  their  exchanges.  We  prefer  to  restore  the  dis- 
carded terms.  The  motive  is  to  procure  the  "  satisfaction" 
of  some  "  desire."  The  condition  under  which  we  prefer 
to  make  it  is,  at  the  least  "  ex]3enditure  of  effort,"  or,  to 
take  the  terminology  of  the  second  school,  "  to  get  addi- 
tional '  wealth '  at  the  least  possible  sacrifice."  Translated 
into  the  language  of  commercial  life  it  means,  "  Buy  in  the 
cheapest  and  sell  in  the  dearest  market "  ;  and  in  case  he 
repeats  the  operation  often  enough  a  man  will  be  getting 
rich.  But  what  determines  the  vital  fact,,  which  is  the 
cheapest  and  which  the  dearest  marliet  f  Is  there  any  mar- 
ket in  the  world,  except  the  home  market,  in  which  fifty 
million  Americans  can  supply  their  wants  hj  exchange  f 
Can  the  "  satisfaction "  of  all  their  "  desii-es "  be  had  in 
any  condition  except  that  of  direct  prodtiction  ?  For  an- 
swers to  these  questions  we  shall  ransack  treatises  and  es- 
says in  vain.  The  answers  lie,  obviously,  in  facts  which 
are  open  before  us  on  the  pages  of  American  experience. 

IlTow,  as  political  economy  is  a  moral  science  and  has 
its  base  in  our  mental  characteristics,  we  would  seem  to 
have  exhausted  it  in  ascertaining  the  attitude  of  the  mind 
as  influenced  by  various  passions,  desires,  hopes,  fears,  and 
the  like.  The  "  satisfaction  "  of  "  desires,"  "  the  desire 
for  additional  wealth,"  is  the  mental  affection.     Of  that 


THE   MOTIVE   TO   PRODUCTION.  49 

we  are  conscious ;  that  we  know  bj  the  act  of  introspection. 
The  "  least  effort,"  the  least  possible  sacrifice,  is  an  exter- 
nal fact.  The  measure  of  resistance  to  us  can  only  be 
reached  by  experience.  AVhich  is  the  "  cheapest  market '' 
and  which  is  the  "  dearest  market "  is  an  external  fact  to 
be  ascertained  by  experiment,  as  is  the  fact  whether  we  can 
supply  our  wants  by  a  resort  to  that  market.  The  data  for 
the  settlement  of  these  questions  are  not  to  be  found  in  the 
science ;  they  depend  on  external  material  conditions  which 
change  every  day  and  every  horn*.  We  can  follow  the 
changes  which  take  place  in  our  own  desires  and  the  things 
which  satisfy  those  desires,  but  the  means  of  satisfaction  lie 
outside  of  ourselves,  and  which  is  the  "  cheapest  "  and  which 
is  the  "  dearest "  means  of  reaching  them  can  only  be  found 
out  upon  actual  trial.  Political  economy  tells  us  how  we 
shall  act  when  we  come  to  it,  but  does  not  know  how  we 
shall  come  to  it.  It  is  silent  before  the  great  class  of  satis- 
factions which  we  seek,  when  strength  of  desire  is  overruling 
all  considerations  of  cost  in  exchange  value  ;  and  when  even 
the  world's  market  does  not  need  and  will  not  take  enough 
of  the  commodities  we  offer  in  exchange  to  enable  us  to  huy 
what  we  need.  It  happens  that,  in  the  divine  ordering  of 
the  nations,  the  people  of  America  can  make  what  they  need. 
But  we  return  to  the  platform  which  Prof.  Perry  has 
laid  down  for  himself  to  stand  on  :  "  When  a  man  shaves 
his  own  face,  our  science  has  nothing  to  say ;  when  the 
barber  shaves  him  for  a  fee,  it  has  a  good  deal  to  say.  .  .  . 
Efforts  of  all  kinds  that  find  their  purpose  and  end  in  an 
exchange  are  production  ;  efforts  put  forth  for  amusement, 
for  self -improvement,  for  benevolence,  for  personal  or 
family  gratification,  are  not  production.  Political  economy 
has  to  do  with  processes  only  as  those  are  related  to  sales, 
and  it  makes  no  difference  what  kind  of  processes  they  are 
if  they  have  that  design  and  issue." 
4 


50  PROTECTION    VS.  FREE   TRADE. 

The  system,  tlien,  takes  cognizance  only  of  individuals 
and  of  no  motive  except  personal  gain.  It  excludes  all 
altruistic  motives,  and  at  a  blow  cuts  out  pai'ental,  patri- 
otic, charitable,  and  religious  considerations.  It  can  have 
nothing  to  do  with  art,  or  beauty,  or  ethics.  It  dissects 
out  of  the  corpus  of  human  life  a  body  of  experience 
which,  out  of  relation  to  its  antecedents  and  consequents, 
is  without  significance.  It  takes  out  of  the  conduct  of  sen- 
tient beings,  having  thoughts,  ajffections,  and  will,  exactly 
the  portion  in  which,  by  and  in  itself,  resides  neither  intel- 
lectual nor  moral  value.  We  have  found  a  definite  field  of 
the  science,  but  is  it  worth  exploring  ?  We  have  found 
the  limits  of  political  economy,  but  we  can  not  stir  hand 
or  foot  without  passing  them.  In  this  little  kingdom,  we 
no  sooner  leave  "  John  o'Groat's  "  than  we  are  at  "  Land's 
End."  We  chafe  against  the  bounds  set  to  our  inquiries, 
but  in  vain.  There  is  no  germinal  idea  in  the  premises 
we  have  imposed  on  ourselves.  While  they  are  true  in 
point  of  fact,  they  are  bald,  barren  truisms.  The  premises 
are  true,  the  reasoning  correct,  but  the  conclusions  are  use- 
less. They  are  unrelated  propositions,  have  no  fructifying 
contents,  and  are  incapable  by  themselves  of  leading  to  one 
additional  inference.  In  tlie  words  of  Prof.  Leslie,  a  pro- 
testmg  disciple  of  the  English  school :  "  Yet  without  the 
family,  and  the  altruistic  as  well  as  the  self-regarding  mo- 
tives that  maintain  it "  (and  the  same  may  be  said  of  the 
sentiment  of  nationahty),  "the  work  of  the  world  would 
come  to  almost  a  stand-still ;  saving  for  the  remote  future, 
would  cease ;  there  would  be  no  durable  wealth ;  men 
would  not  seek  to  leave  anything  behind  them ;  the  houses 
of  the  wealthiest,  if  there  were  any  houses  at  all,  would  be 
built  to  last  only  for  their  own  time." 

In  this  scheme,  the  climax  of  life  only  comes  at  the 
point  where  something  is  being  made  ready  to  sell — the 


THE  MOTIVE   TO  PRODUCTIOX.  51 

crisis  of  affairs  lies  in  the  "swap."  The  laboring-man  who 
has,  with  some  success,  fought  his  way  through  the  dread- 
ful competition  of  life,  sits  down  with  his  wife  to  brood 
over  the  destiny  of  the  son  who  has  been  born  to  them. 
In  a  large  way,  he  has  learned  to  appreciate  tlie  value  of 
some  ecpiipment  besides  a  pair  of  hands  with  which  the  lad 
may  be  made  ready  for  his  battle.  Out  of  the  depths  of 
their  parental  ailections  they  conclude  upon  a  liberal  edu- 
cation for  the  son,  and  prepare  for  the  strain  upon  their 
narrow  resources.  Among  institutions  of  equal  facilities 
to  give  educational  "services"  for  this  laboring-man's 
money,  it  is  quite  certain  he  will  choose  the  one  requiring 
"  the  least  sacrifice "  on  his  part ;  he  "  will  buy  in  the 
cheapest  market."  But  what  is  essentially  the  human  ele- 
ment in  this  determination  of  parental  instincts?  The 
overmastering  love  of  that  father  and  mother  ?  or  the  mere 
higgling  for  the  price  of  tuition  ? 

A  distinguished  commander  of  the  Army  of  the  Poto- 
mac dies  in  the  city  of  his  birth.  Prompted  by  an  effect- 
ive union  of  many  honorable  motives — love  of  country, 
pride,  comradeship,  homage  to  patriotic  worth — the  sur- 
vivors of  the  marches  and  battles  and  victories  in  which 
they  participated  under  the  dead  general  feel  impelled  to 
erect  a  commemorative  statue,  and  as  an  appeal  to  coming 
generations.  It  may  or  may  not  be  that  in  the  selection  of 
artists  and  contractors  to  execute  their  purpose  they  will 
consult  "market  values."  Does  the  center  of  forces  im- 
pelling them  lie  in  the  earnest  and  honorable  impulses  of 
humanity  which  suggested  the  enterprise,  or  in  the  contract 
stipulating  for  the  "  purchase-money  "  ? 

The  officials  of  a  great  and  populous  town  resolve  upon 
appropriate  public  buildings.  Instead  of  stopping  at  mere 
"  utility,"  they  resolve  upon  a  structure  which  shall  be  a 
worthy  symbol  of  the  enterjprise  and  civilization  of  their 


52  PROTECTION    VS.  FREE  TRADE. 

day.  They  summon  architects  who  may  be  able  to  embody 
their  purposes  in  symmetrical  and  artistic  lines.  Their 
applauding  fellow-citizens  co-operate,  and  at  last  emerge  the 
"  plans  and  specifications  "  of  the  structure  which  for  them 
and  their  children  promises  to  be  an  educational  force — 
"  a  thing  of  beauty  and  a  joy  forever."  In  the  final  analy- 
sis, would  the  social  value  of  the  transaction  reside  in 
the  refined  and  trained  impulses  of  the  community,  or 
would  its  whole  virtue  be  concentrated  in  the  advertise- 
ment for  "  sealed  proposals,"  and  the  whole  enterprise  cul- 
minate in  the  "  awarding  of  the  contract "  to  "  the  lowest 
bidder"? 

Within  the  memory  of  most  of  us,  three  millions  of 
men  in  the  United  States,  with  no  reference  to  exchange 
values,  took  their  lives  in  their  hands  to  wage  a  war  with 
their  own  countrymen  and  kinsmen.  They  went  to  render 
"  services  "  in  sufferings,  pain,  and  death  under  a  "  strip  of 
painted  canvas  " — the  flag  of  their  country,  and  the  symbol 
of  its  majesty.  These  services  they  conceived  involved 
whatever  of  chivalry,  patriotism,  and  morality  was  appro- 
priate to  them  as  citizens  of  a  definite  nation.  The  ex- 
changeable value  of  their  services  was  thirteen  dollars  per 
month.  To  obtain  these  thirteen  dollars  they  left  com- 
fortable homes,  lucrative  employments,  and  enterprises  of 
great  worth  and  moment.  Will  it  be  said  that  this  was  not 
an  economic  act,  and  that  poHtical  economy  takes  it  out  of 
its  purview  ?  But  a  science  which  deals  with  these  men 
must  deal  with  them  as  wholes.  If  economic  considera- 
tions disappear  so  readily  out  of  their  conduct,  it  is  hardly 
worth  while  to  attempt  any  scientific  theory  of  the  mere 
phalanges  which  political  economy  amputates  from  such  a 
body — to  deal  with  the  body  without  the  soul.  The  eco- 
nomic harmonies  can  only  be  evolved  when  we  ennoble  self- 
interest  as  the  spring  of  industry  with  the  tones  of  domes- 


THE  MOTIVE  TO  PRODUCTION.  53 

tic  affection,  jmblic  spirit,  tlie  sense  of  duty,  iulierent 
energy,  intellectual  tastes,  and  moral  judgments. 

A  science  which  sees  nothing  of  economic  forces  in  this 
series  of  human,  every-day  transactions,  can  possess  little 
human  interest.  To  abstract  out  of  these  only  the  idea  of 
"  exchangeable  value  "  is  to  have  a  residuum  unworthy  of 
further  analysis.  So  much  for  the  motives  to  production 
which  the  science  leaves  out  of  the  pale  of  economics, 

"  But,"  say  the  professors,  "  after  the  thing  is  sold, 
economy  loses  its  interest  in  it."  As,  in  its  language, 
"  consumption  is  purchase,"  the  science  takes  no  account  of 
consumption — takes  no  account  of  what  becomes  of  things 
— what  disposition  is  made  of  "  wealth "  after  it  is  pur- 
chased. 

"We  know  not  of  any  laws  of  the  consmnj)tion  of 
wealth,  as  the  subject  of  a  distinct  science ;  they  can  be  no 
other  than  the  laws  of  human  enjoyment."  But  does  not 
the  science  obviously  rest  on  the  laws  of  human  enjoyment  ? 

Mr.  Mill  had  said  that  there  was  no  "  science  of  con- 
sumption " ;  Prof.  Perry  considers  consumption  as  not 
being  in  view  of  political  economy.  Prof.  Jevons,  on  the 
contrary,  says,  "  The  whole  theory  of  economy  depends 
upon  a  correct  theory  of  consumption."  In  this  propo- 
sition Mr,  Sidgwick  mainly  concurs.  Writers  who  hold  to 
the  stricter  definition  of  political  economy  as  the  science  of 
exchanges  have  a  very  good  reason  for  excluding  the  toj^ic 
of  consumption.  Consumption,  when  dealt  with  as  a  social 
fact,  leads  out  of  economy  to  sociology ;  and  if  any  word 
can  enrage  a  modem  free-trade  economist  it  is  the  word 
"social  science,"  or  "sociology,"  unless  we  except  the 
word  "  national "  in  this  connection.  Political  economists 
have  a  right  to  define  their  science,  but  then  they  are 
bound  by  their  own  definitions,  and  other  people  have  a 
right  to  insist  on  their  staying  witliin  the  limits  they  them- 


54  PROTECTIOX    VS.   FREE   TRADE. 

selves  have  prescnbed.  Prof.  Walker  has  presented  some 
urgent  reasons  wliy  economy  dees  not  stop  at  production 
and  the  "  exchange." 

"  It  is  in  the  use  made  of  the  existing  body  of  wealth 
that  the  wealth  of  the  next  generation  is  determined.  It 
matters  far  less  for  the  futm-e  greatness  of  a  nation  what 
is  the  sum  of  its  wealth  to-day,  whether  large  or  small, 
than  what  are  the  habits  of  its  people  in  the  daily  con- 
sumption of  that  wealth ;  to  what  use  those  means  are  de- 
voted, whether  to  ends  which  inspire  social  ambition,  which 
restrict  population  within  limits  consistent  with  a  high 
j)er  capita  production,  which  increase  the  elRciency  of  the 
laborer  and  supply  instrumentalities  for  rendering  his 
labor  still  more  productive,  or  to  ends  which  allow  the  in- 
crease of  population  in  the  degree  that  of  itself  involves 
poverty,  squalor,  and  disease,  which  debauch  the  laborer 
morally  and  physically,  striking  at  both  his  power  and 
disposition  to  work  hard  and  continuously,  and  which 
waste,  in  idle  or  vicious  indulgences,  the  wealth  which 
should  go  to  increase  capital. 

"  To  trace  to  their  effects  upon  production  the  forces 
which  are  set  in  motion  by  the  uses  made  of  wealth,  to 
show  how  certain  forms  of  consumption  clear  the  mind, 
strengthen  the  hand,  and  elevate  the  aims  of  the  individual 
economic  agent  while  promoting  that  social  order  and 
mutual  confidence  which  are  favorable  conditions  for  the 
complete  development  and  harmonious  action  of  the  in- 
dustrial system ;  how  other  forms  of  consumption  debase 
and  debauch  man  as  an  economic  agent  and  introduce  dis- 
order and  waste— here  is  the  opportunity  for  some  great 
moral  philosopher  to  write  the  most  important  chapter '  in 
political  economy,  now,  alas !  almost  a  blank." 

1  This  chapter  has  been  written ;  it  is  "  The  Economics  of  Cousutnption," 
by  Robert  Scott  Moffat. 


THE  MOTIVE  TO  rRODUCTIOX.  55 

Mr.  Walter  Bageliot  lias  something  to  say  on  this  head : 
"  Just  as  this  science  takes  an  abstract  and  one-sided  view 
of  man,  who  is  one  of  its  subjects,  so  it  also  takes  an  ab- 
stract and  one-sided  view  of  wealth,  wliich  is  its  other  sub- 
ject. Wealth  is  infinitely  various ;  as  the  wants  of  human 
nature  are  almost  innumerable,  so  the  kinds  of  Vv'ealth  are 
various.  AVhy  man  wants  so  many  things  is  a  great  sub- 
ject, fit  for  inquiry ;  which  of  them  it  would  be  wise  for 
men  to  want  more  of,  and  which  of  them  it  would  be  wise 
to  want  less  of — are  also  great  subjects  equally  fit.  But 
with  these  subjects  political  economy  does  not  deal  at  all. 
It  leaves  the  first  to  the  metaphysician,  who  has  to  explain, 
if  he  can,  the  origin  and  order  of  human  wants,  and  the 
second  to  the  moralist,  who  is  to  decide,  to  the  best  of  his 
ability,  which  of  these  tastes  are  to  be  encouraged  and 
when,  which  to  be  discouraged  and  when.  The  only  pecul- 
iarity of  wealth  with  which  the  economist  is  concerned  is 
its  differentia  s])ec'(jica — that  which  makes  it  wealth.  .  .  . 
He  regards  a  pot  of  beer  and  a  picture,  a  book  of  religion 
and  a  pack  of  cards,  as  all  equally  wealth,  and  therefore, 
for  his  purpose,  equally  worthy  of  regard." 

Prof.  Leslie  restores  the  relation  of  the  parts  of  the 
science  in  correspondence  with  the  relation  between  actual 
human  attributes  :  "  The  love  of  gin  is  the  love  of  one 
kind  of  wealth  which  too  often  competes  in  the  mind  of  a 
poor  man  with  the  love  of  a  decent  dwelling.  .  .  .  One 
of  the  most  important  economic  inquiries  relates  to  the 
changes  which  take  place  in  the  direction  of  the  chief 
wants  of  mankind  and  the  species  of  wealth  which  they 
call  into  existence.  The  main  object  of  industry  and  ac- 
cumulation on  the  part  of  the  French  nation  is  landed 
property  ;  the  chief  impulse  determining  the  national  econ- 
omy is  the  desire  of  it ;  in  England  the  desire  is  absent 
among  the  nation  at  large,  and  the  one  which  totally  takes 


56  PROTECTIOX    VS.   FREE   TRADE. 

its  place  witli  no  small  number  of  Englishmen  is  the  love 
of  beer.  Happily  in  England  there  is  a  still  more  general 
object  of  desire  in  the  house,  and  the  house  owes  its  struct- 
ure, perhaps  its  very  existence,  to  the  institution  of  the 
family.  .  .  .  The  formula  of  demand  and  supply  is  still 
supposed  by  some  economists  to  explain  everything  fully, 
but  both  demand  and  supply  have  in  every  case  a  long 
history.  ...  It  is  a  misrepresentation  of  the  Mercantile 
System  [to  say]  that  its  adherents  considered  nothing  but 
money  as  "wealth;  still  they  did  attach  undue  importance 
to  it,  and  the  consequence  of  the  excessive  esthnation  in 
which  they  held  it  demonstrates  the  absurdity  of  basing 
either  the  economic  prosperity  of  nations  or  economic  sci- 
ence on  tlie  abstraction,  which  is  the  corner-stone  of  both, 
in  the  deductive  system." 

And  then  Mr.  Bagehot  comes  in  again  and  brings  us 
around  to  the  point  where  we  started  :  "Of  course  this 
reasoning  implies  that  the  boundaries  of  this  sort  of  pohti- 
cal  economy  are  arbitrary,  and  might  be  fixed  here  or  there. 
But  this  is  already  done  when  it  is  said  that  political  econo- 
my is  an  abstract  science.  All  abstractions  are  arbitrary ; 
they  are  more  or  less  convenient  fictions  made  by  the  mind 
for  its  own  purposes.  An  abstract  idea  means  a  concrete 
fact  or  set  of  facts  minus  something  thrown  away.  The 
fact  or  set  of  facts  were  made  by  nature,  but  how  much 
you  will  throw  aside  of  these  and  how  much  you  will  keep 
for  consideration  you  settle  for  yourself.  There  may  be 
any  number  of  political  economies,  according  as  the  subject 
is  di\dded  off  in  one  way  or  another." 

Imagine  this  mode  of  dealing  with  such  sciences  as 
geometry,  chemistry,  botany,  dynamics,  physiology,  statics, 
etc. !  Under  this  conception  of  a  science  its  professors 
and  teachers  have  about  the  advantages  which  the  invent- 
ors  of  chess-problems  have  in   chess.     The   chances  are 


THE   MOTIVE  TO  PRODUCTION.  57 

that  tliej  will,  in  tlie  main,  be  able  to  solve  their  own 
problems. 

But  in  actual  life  we  do  not  invent  our  own  problems. 
They  are  made  ready  to  hand  for  us,  and  Kature  makes  no 
"  allowances  "  for  our  mistakes  in  their  solution.  Take  up 
any  systematic  treatise  on  economy,  and  the  "suppositions" 
are  made  upon  wJiich  the  author  is  to  proceed.  The  "  an- 
swer "  vdU.  correspond  to  no  actual  state  of  facts,  and  will 
be  reached  after  divers  "but  according  to  the  original 
hypothesis,"  "allowances  for  disturbing  causes,"  "other 
things  being  equal,"  and  the  like  dove-tailed  devices.  It 
is  true  that  "  the  desire  of  wealth  "  and  "  the  aversion  to 
labor"  are  facts  of  man's  nature.  While  they  are  antago- 
nistic principles,  they  are  not  ultimate  principles,  and  they 
are  mingled,  in  operation,  with  a  multitude  of  other  prin- 
ciples. Any  inference  drawn  from  the  operation  of  these 
two  alone  must,  as  Prof.  Caimes  says,  "  land  us  in  conclu- 
sions which  have  no  resemblance  to  existing  realities."  Or, 
recurring  to  Mr.  Ruskin's  case  of  the  professor  of  gymnas- 
tics who  began  his  instructions  by  the  assumption  that  the 
"  human  body  was  constituted  of  muscles  and  flesh,  with- 
out any  bones."  Having,  "  under  this  supposition,"  ascer- 
tained what  exercises  his  "abstract"  man  could  perform, 
he  introduced  the  skeleton  as  a  "  distm'bing  element."  His 
theory  was  open  to  the  single  objection,  at  least,  that  it  was 
"  deficient  in  application."  This  is  not  one  whit  more  gro- 
tesque and  unphilosophical  than  the  economists'  treatment 
of  man  in  dealing  with  his  moral  structure.  They  have 
endeavored  to  give  to  their  "  rude  generalizations  "  the  au- 
thority of  "laws." 

What  are  the  conditions  which  direct  the  energies  and 
detennine  the  actual  occupations  and  pm'suits  of  mankind 
in  different  ages  and  countries  ?  This  is  the  main  prob- 
lem.   In  its  application  to  the  United  States,  it  is  the  prol> 


5S  PROTECTIOX    VS.   FREE   TRADE. 

lem  for  the  American  statesman  and  tlie  American  voter 
to  determine.  How  far,  then,  does  the  science  of  political 
economy  enable  us  to  separate  the  elements  of  the  case  ? 
What  binding  force  can  its  scientists  assert  over  the  con- 
duct of  the  governing  power  ? 

No  perfection  of  mechanism  in  a  steam-engine  would 
be  of  any  avail  unless  connected  with  a  nest  of  boilers. 
Provision  must  be  made  for  "  letting  on  "  steam,  as  well  as 
a  pipe  prepared  for  the  "  exhaust."  The  machine  can  not 
run  by  force  of  steam  confined  in  a  closed  circuit.  So  with 
the  energies  of  a  people.  The  greater  their  productive 
force,  the  more  "  efforts "  they  make,  the  greater  will  be 
their  creation  of  commodities — the  "  satisfactions "  they 
will  experience.  "  Satisfactions  "  are  the  motive  to  "ef- 
fort." "  Desires  "  of  one  kind  and  another  are  the  motive 
force,  and  grow  out  of  the  inherited  traits  and  historical 
traditions  of  the  particular  people.  They  may  have  the  in- 
herent power  and  the  physical  conditions  to  satisfy  them 
by  a  direct  effort  of  production,  at  a  less  cost  of  labor  and 
sacrifice  than  by  the  indirect  process  of  exchange.  So7ne 
of  their  desires  they  can  manifestly  procure  at  less  cost  of 
labor  and  sacrifice  by  exchanges  abroad.  So  many  as  we 
can  thus  procure  it  is  our  manifest  advantage  to  procure ; 
if  we  can  procure  all  of  them  in  this  way,  very  good.  It 
may  very  well  be  that  so7ne  exchanges  abroad  are  advan- 
tageous, and  so  it  is  ;  it  may  very  well  be  that  all  ex- 
changes made  abroad  would  not  be  advantageous,  but,  on 
the  contrary,  would  be  hnpossible — and  so  it  is.  It  de- 
pends upon  the  particular  facts  of  our  situation  as  a  nation : 
how  much  we  want ;  how  many  and  of  what  kind  are  our 
desires  ;  what  we  have  got  to  pay  for  them  with,  and  how 
much  foreigners  want  of  what  we  have  to  offer  in  exchange. 
It  is  manifest  that  it  is  a  special  problem,  depending  on  a 
special  collocation  of  facts.     So  far  as  our  surplus  will  be 


THE   MOTIVE   TO   TRODUCTION.  59 

salable  in  foreign  marlvets,  we  are  interested  in  the  foreign 
ti-ade ;  so  far  as  our  wants  are  too  numerons  to  be  supplied 
by  the  things  we  can  buy  and  'pay  for  abroad,  we  must 
supply  them  at  home.  Provision  must  then  be  made  for 
supplying  them  by  home  industry.  The  only  condition  by 
which  the  last  alternative  can  be  realized  is  by  saving  more 
or  less  of  the  domestic  market  by  ixstrictions  on  the  import 
of  foreign  commodities.  One  form  of  this  is  a  protective 
tariff. 

It  is  our  interest  to  buy  all  we  can  with  our  cotton,  to- 
bacco, wheat,  and  beef.  The  limit  of  our  purchases  will 
depend,  not  on  our  desires,  or  our  capacity  to  produce  at 
home,  but  on  the  demand  for  these  products  in  the  foreign 
markets.  No  treatise  on  political  economy  will  ever  tell 
us  how  much  and  what  to  desire  ;  how  much  agricultural 
produce  we  can  raise,  or  how  much  the  foreign  markets 
will  take,  or  its  price.  In  the  main,  we  must  depend  on 
our  own  direct  efforts,  as  the  facts  of  our  history  have 
demonstrated. 


CHAPTErw  lY. 

"W'nO    IS    BOUND     BY    THE    SCIENCE — SOME     DISTINCTIVE     CRITI- 
CISM. 

Aftee  this  disagreement  upon  fundamental  proposi- 
tions, we  shall  not,  perhaps,  be  amazed  at  the  general  dis- 
claimer on  the  part  of  its  most  eminent  teachers  of  the 
jm-isdiction  of  the  science  over  the  legislator. 

This  disclaimer  on  the  part  of  some  of  its  professors 
g-rows  out  of  their  consciousness  of  its  unreal  and  artificial 
nature ;  on  the  part  of  others  of  its  professors,  it  does  not 
grow  out  of  modesty. 

Mr.  McCulloeh  says  that  "  the  economist  who  confines 
himself  to  mere  enunciation  of  general  principles  or  ab- 
stract truths  may  as  well  address  himself  to  the  pump  at 
Oldgate  as  to  the  British  public.  If  he  wish  to  be  any- 
thing better  than  a  declaimer,  or  to  confer  any  real  advan- 
tage upon  any  class  of  his  countrymen,  he  must  leave  gen- 
eral reasoning  and  show  the  extent  of  the  injury  entailed 
upon  the  community  by  the  neglect  of  his  principles." 

liassau  "William  Senior,  the  eminent  Professor  of  Politi- 
cal Economy  in  the  University  of  Oxford,  who  wrote  since 
the  date  of  the  free-trade  agitation  in  England,  with  great 
emphasis  indicates  the  agencies  of  government  to  which 
the  conclusions  of  so  hypothetical  a  science  do  not  extend. 
He  says : 

"  These  inquiries  involve,  as  their  general  premises,  the 
consideration  of  the  whole  theory  of  morals,  of  govern- 


WHO   IS   BOUND   BY   THE   SCIENCE.  Ql 

mcnt,  and  of  civil  and  criminal  legislation ;  and,  for  their 
particular  premises,  a  knowledge  of  all  the  facts  which 
aiiect  the  social  condition  of  every  community  whose  con- 
duct the  economist  proposes  to  influence.  .  .  ..  The  ques- 
tions to  what  extent  and  under  what  circumstances  the 
possession  of  wealth  is  on  the  whole  beneficial  or  injurious 
to  its  possessor,  or  to  the  society  of  which  he  is  a  member  ? 
What  distribution  of  wealth  is  most  desirable  in  each  dif- 
ferent state  of  society  ?  And  what  are  the  means  by  which 
any  given  country  can  facilitate  such  a  distribution  ?  AU 
these  are  questions  of  great  interest  and  difficulty,  but  no 
more  form  part  of  the  science  of  political  economy,  in  the 
sense  in  which  we  use  that  term,  tlian  navigation  forms 
part  of  the  science  of  astronomy.  The  principles  supplied 
by  political  economy  are  indeed  necessary  elements  in  their 
solution,  but  they  are  not  the  only  or  even  the  most  im- 
portant elements.  The  writer  who  pursues  such  investiga- 
tion is  in  fact  engaged  on  the  great  science  of  legislation ; 
a  science  which  requires  a  knowledge  of  the  general  princi- 
ples supplied  by  political  economy,  but  differs  from  it  essen- 
tially in  its  subject,  its  premises,  and  its  conclusions.  The 
subject  of  legislation  is  not  wealth,  but  human  weKare.  Its 
premises  are  dra"wn  from  an  infinite  variety  of  phenomena, 
supported  by  evidence  of  every  degree  of  strength,  and 
authorizing  conclusions  deserving  every  degree  of  assent, 
from  perfect  confidence  to  bare  suspicion.  And  its  ex- 
pounder is  enabled,  and  even  required,  not  merely  to  state 
general  facts,  but  to  urge  the  adoption  or  rejection  of  act- 
ual measures  or  trains  of  action.  .  .  .  His  (the  economist's) 
premises  consist  of  a  very  few  general  propositions,  the  re- 
sult of  observation  or  consciousness,  and  scarcely  requiring 
proof,  or  even  formal  statements  which  almost  every  man, 
as  soon  as  he  hears  them,  admits  as  familiar  to  his  thoughts, 
or  at  least  as  included  in  his  previous  knowledge ;  and  his 


62  PKOTECTIOX    VS.   FREE   TRADE. 

inferences  are  nearly  as  general  and,  if  he  lias  reasoned  cor- 
rectly, as  certain  as  his  premises.  .  .  .  The  confounding  the 
science  of  political  economy  with  the  sciences  and  arts  to 
which  it  is  subservient,  has  reduced  economists  sometimes 
to  undertake  inquiries  too  vague  to  lead  to  any  practical 
results,  and  sometimes  to  pursue  the  legitimate  objects  of 
the  science  by  means  unfit  for  their  attainment.  To  their 
extended  view  of  the  objects  of  political  economy  is  to  be 
attributed  the  undue  importance  which  many  economists 
have  ascribed  to  the  collection  of  facts,  and  then-  neglect  of 
the  far  more  important  process  of  reasoning  accurately  from 
the  facts  before  them ;  .  .  .  but  the  facts  in  which  the  gen- 
eral principles  of  the  science  rest,  may  be  stated  in  a  very 
few  sentences,  and,  indeed,  in  a  very  few  words.  But  that 
the  reasoning  from  these  facts,  the  drawing  from  them 
correct  conclusions,  is  a  matter  of  great  difficulty,  may  be 
inferred  from  the  imperfect  state  in  which  the  science  is 
now  found  after  it  has  been  so  long  and  so  intently 
studied." 

Many  millions  of  men  in  America  have  been  waiting 
years  for  a  demonstration  "  in  a  very  few  sentences,  and, 
indeed,  in  a  very  few  words,"  or,  indeed,  in  many  words  and 
many  sentences,  of  the  economic  propriety  of  the  applica- 
tion of  principles  of  free  trade  to  these  United  States. 

We  proceed  to  state  at  considerable  length  the  attitude 
of  John  Stuart  Mill  toward  the  practical  value  of  the 
conclusions  of  the  science : 

"  In  the  definition  which  we  have  attempted  to  frame 
of  the  science  of  political  economy,  we  have  characterized 
it  as  essentially  an  abstract  science,  and  its  method  as  the 
method  a  jpriori.  Such  undoubtedly  is  its  character  as  it 
has  been  understood  and  taught  by  its  most  distinguished 
teachers.  It  reasons,  and,  as  we  contend,  must  necessarily 
reason,  from  assumptions,  not  from  facts.     It  is  built  upon 


WnO   IS  BOUND   BY   TUB   SCIENCE.  G3 

liypotlieses  strictly  analogous  to  thoso  which,  under  the 
name  of  definitions,  are  the  foundation  of  the  other  ab- 
stract sciences.  Geometry  presupposes  an  arbitrary  defi- 
nition of  a  line — '  that  which  has  length  1)ut  not  breadth.' 
Just  in  the  same  manner  does  political  economy  presuppose 
an  arbitrary  definition  of  man,  as  a  being  who  invariably 
does  that  by  which  he  may  obtain  the  greatest  amount  of 
the  necessaries,  conveniences,  and  luxuries  of  life  with  the 
smallest  quantity  of  labor  and  physical  self-denial  with 
which  they  can  be  obtained  in  the  existing  state  of  knowl- 
edge." Lamenting  the  want  of  opportunity  to  make,  in  the 
science,  an  experimentum  crucis,  he  proceeds  : 

"How,  for  example,  can  we  obtain  a  crucial  experi- 
ment on  the  effect  of  a  restrictive  commercial  policy  upon 
national  wealth  ?  We  must  find  two  nations  alike  in  every 
other  respect,  or,  at  least,  possessed  in  a  degree  exactly 
equal  of  everything  which  conduces  to  national  opulence, 
and  adopting  exactly  the  same  policy  in  all  their  other 
affairs,  but  differing  in  this  only,  that  one  of  them  adopts 
a  system  of  commercial  restriction  and  the  other  adopts 
free  trade.  Doubtless  this  would  be  the  most  conclusive 
evidence  of  all  if  we  could  get  it.  But  let  any  one  con- 
sider how  infinitely  numerous  and  various  are  the  circum- 
stances which  either  directly  or  indirectly  do  or  may 
influence  the  amount  of  the  national  wealth,  and  then  ask 
himself  what  are  the  probabihties  that  in  the  longest  revolu- 
tion of  ages  two  nations  will  be  foimd  which  agree  and  can. 
be  shown  to  agree  in  all  those  circumstances,  except  one." 

Noting,  then,  that  the  actual  facts  do  not  happen  as  the 
theory  provided  that  they  should,  he  goes  on  : 

"  The  discrepancy  between  our  anticipations  and  the 
actual  fact  is  often  the  only  circumstance  which  would 
have  drawn  our  attention  to  some  important  disturbing 
cause  which  we  had  overlooked." 


(34.  PROTECTION    VS.   FEEE   TRADE. 

It  is  to  be  noted  that  this  confessional  passage  contains 
the  germ  of  all  the  reasons  for  the  discrepancies  in  the 
science. 

"  Is'ay,  it  often  discloses  to  us  errors  in  thought,  still 
more  serious  than  the  omission  of  what  can  with  any  pro- 
priety be  termed  a  disturbing  cause.  It  often  reveals  to 
us  that  the  basis  itself  of  the  whole  argument  is  insufficient ; 
that  the  data  from  which  we  had  reasoned  comprise  only 
a  part,  and  not  always  the  most  important  part,  of  the 
circumstances  by  which  the  result  is  determined.  Such 
oversights  are  committed  by  very  good  reasoners,  and  even 
by  a  still  rarer  class,  that  of  good  obseiwers." 

How,  then,  are  we  to  still  this  "jumping  Jack"? 
Why,  go  back  to  the  a  posteriori  road,  which  we  should 
have  taken  in  the  first  place,  and  sift  and  scrutinize  tJie 
facts : 

"  Without  this,  he "  (the  Professor  of  Political  Econ- 
omy) "  may  be  an  excellent  professor  of  abstract  science ; 
for  a  person  may  be  of  great  use  who  points  out  correctly 
what  effects  will  follow  from  certain  combinations  of  pos- 
sible circumstances  in  whatever  tract  of  the  extensive 
region  of  hypothetical  cases  those  combinations  may  be 
found.  He  stands  in  the  same  relation  to  the  legislator  as 
the  mere  geographer  to  the  practical  navigator ;  telling  him 
the  latitude  and  longitude  of  all  sorts  of  2yl<^ces,  hut  not 
how  to  find  whereabout  he  himself  is  sailing.  If,  how- 
ever, he  does  no  more  than  this,  he  must  rest  contented  to 
take  no  share  in  practical  politics,  to  have  no  opinion,  or  to 
hold  it  with  extreme  modesty,  on  the  application  which 
should  be  made  of  his  doctrines  to  existing  circumstances. 

"■  'No  one  who  attemj^ts  to  lay  down  propositions  for  the 
guidance  of  mankind,  however  perfect  his  scientific  acquire- 
ments, can  dispense  with  a  practical  knowledge  of  the  actual 
modes  in  which  the  affairs  of  the  world  are  carried  on,  and 


WnO   IS   BOUXD   BY   THE   SCIENCE.  G5 

an  extensive  personal  exj^erience  of  the  actual  ideas,  feel- 
ings, and  intellectual  and  moral  tendencies  of  Lis  own 
country  and  of  his  own  age.  Tlie  true  practical  statesman 
is  he  who  combines  this  experience  with  a  profound  knowl- 
edge of  abstract  political  philosophy.  Either  acquirement 
without  the  other,  leaves  him  lame  and  impotent,  if  he  is 
sensible  of  the  deficiency ;  renders  him  obstinate  and  jpre- 
sumptuous,  if,  as  is  more  probable,  Tie  is  unconscious  of  it.'''' 

Contrasting  the  student  in  his  closet  and  the  man  of 
business  in  the  outward  world  : 

"  The  one  despises  all  comprehensive  views,  the  other 
neglects  details.  The  one  draws  his  notion  of  the  universe 
from  the  few  objects  with  which  his  course  of  life  has 
happened  to  render  him  familiar ;  the  other,  having  got 
demonstration  on  his  side,  and  forgetting  that  it  is  only  a 
demonstration  nisi — a  proof  at  all  times  liable  to  be  set 
aside  by  the  addition  of  a  single  new  fact  to  the  hypothe- 
sis— denies,  instead  of  examining  and  sifting,  the  allega- 
tions which  are  opposed  to  him." 

The  reconcihation  will  be  found  in  him  "  who  can  make 
the  anticipations  of  the  philosopher  guide  the  obsei-vation 
of  the  practical  man,  and  the  specific  experience  of  the 
practical  man  warn  the  philosopher  when  something  is  to 
be  added  to  his  theory." 

In  the  preface  to  his  treatise,  "  Theory  of  Political 
Economy,"  Prof.  Jevons  takes  occasion  to  say :  "  The  con- 
clusion to  which  I  am  ever  more  clearly  coming  is,  that  the 
only  hope  of  attaining  a  true  system  of  economics  is  to  fling 
aside,  once  and  forever,  the  mazy  and  preposterous  assump- 
tion of  the  Ricardian  school.    Our  English  economists  have 

O 

been  living  in  a  fooFs  paradise.  .  .  .  When  at  length  a 
true  system  of  economics  comes  to  be  established,  it  will  be 
seen  that  that  able  but  wrong-headed  man,  David  Picardo, 
shunted  the  car  of  economic  science  on  to  a  wrong  line,  a 


66  PROTECTIOX    VS.   FREE   TRADE. 

line,  liowever,  on  which  it  was  further  nrged  to  confusion 
by  his  equally  able  and  wrong-headed  admirer,  John  Stuart 
Mill.  ...  It  will  be  a  work  of  labor  to  pick  np  the  frag- 
ments of  a  shattered  science  and  to  start  anew ;  but  it  is  a 
work  from  which  they  must  not  shrink  vrho  wish  to  see 
any  advance  of  economic  science."  And  his  last  word  is 
a  protest  against  "  the  noxious  influence  of  authority." 

"  There  is  ever  a  tendency  of  the  most  hurtful  kind  to 
allow  opinions  to  crystalUze  into  creed.  Especially  does 
this  tendency  manifest  itself  when  some  eminent  author, 
enjoying  power  of  clear  and  comprehensive  exposition,  be- 
comes recognized  as  an  authority.  His  works  may,  perhaps, 
be  the  best  which  are  extant  upon  the  subject  in  question ; 
they  may  contain  more  truth  with  less  error  than  we  can 
meet  elsewhere.  But  to  eiT  is  human,  and  the  best  works 
should  ever  be  open  to  criticism.  If,  instead  of  welcoming 
inquiry  and  criticism,  the  admirers  of  a  great  author  accept 
his  writings  as  authoritative,  both  in  their  excellences  and 
in  their  defects,  the  most  serious  injury  is  done  to  tnith. 
In  matters  of  philosophy  and  science,  authority  has  ever 
been  the  great  opponent  of  truth.  A  despotic  calm  is  usu- 
ally the  triumph  of  error.  In  the  republic  of  the  sciences, 
sedition  and  even  anarchy  are  beneficial  in  the  long  run  to 
the  greatest  happiness  of  the  greatest  number.  .  .  .  Show 
us  the  undoubted,  infallible  criterion  of  absolute  truth,  and 
we  will  hold  it  as  a  sacred,  inviolable  thing ;  but,  in  the 
absence  of  that  infallible  criterion,  we  have  all  an  equal 
right  to  grope  about  in  our  search  of  it,  and  nobody  and 
no  school  nor  clique  must  be  allowed  to  set  up  a  standard 
of  orthodoxy  which  shall  bar  the  freedom  of  scientific 
inquiry. 

"  I  have  added  these  words  because  I  think  there  is 
some  fear  of  the  too  great  influence  of  authoritative  writers 
in  political  economy.     I  protest  against  deference  for  any 


WnO   IS   BOUND   BY   TDE   SCIENCE.  67 

man,  whether  John  Stuart  Mill  or  xidaiii  Smith  or  Aris- 
totle, being  allowed  to  check  inquiry.  Our  science  has 
become  too  much  a  stagnant  one,  in  which  opinions  rather 
than  experience  and  reason  are  appealed  to." 

This  is  the  testimony  of  Englishmen  who  have  actually 
built  up  what  is  called  and  taught  as  the  official  science  of 
political  economy.  Many  more  names,  expounders  of  the 
same  system,  might  be  added,  with  the  same  general  reser- 
vation which  they  make  to  the  practical  untrustworthiness 
of  the  science.  They  have  had  misgiving  as  to  its  value  in 
affairs,  but,  in  a  half-hearted,  reluctant  sort  of  way,  have 
seemed  to  think  that,  while  it  was  an  artifice,  it  might  still 
pass  as  a  scientific  one. 

The  name  of  Mr.  AValter  Bagehot  will  be  recognized  as 
that  of  a  man  eminent  among  recent  students  in  various 
departments  of  economy  and  politics,  as  well  as  a  man  of 
great  business  aptitude.  He  is  also  well  known  as  an  ortho- 
dox believer  in  the  Manchester  school  of  political  economy 
— at  least  as  applied  to  England  at  this  date.  He  quarrels 
with  its  "  postulates  "  and  its  "  preliminaries,"  but  on  the 
whole  he  holds  its  conclusions  applicable,  hut  ajppllcaMe 
only  to  the  existing  commercial  facts  in  England.  After 
commenting  on  the  circumstances,  often  noted,  that  those 
who  are  conversant  ^^-ith  its  abstractions  are  usually  with- 
out tnie  contact  with  its  facts,  and  that  those  who  are  in 
contact  with  its  facts  have  usually  little  sympathy  with 
and  little  cognizance  of  its  abstractions,  he  gives  the  rea- 
sons why  he  thinks  the  science  is  held  in  so  low  an  esti- 
mate : 

"Dealing  with  matters  of  business,  it  assumes  that 
man  is  actuated  only  by  motives  of  business.  It  assumes 
that  every  man  who  makes  anything  makes  it  for  money, 
that  he  always  makes  that  which  brings  him  in  most  at 
least  cost,  and  that  he  will  make  it  in  the  way  that  wiU 


68  PROTECTION    VS.   FREE   TRADE. 

produce  most  and  spend  least.  It  assumes  that  any  man 
who  buys,  buys  with  his  whole  heart,  and  that  he  who  sells, 
sells  with  his  whole  heart,  each  wanting  to  gain  all  possible 
advantage.  Of  course,  we  know  that  this  is  not  so,  that 
men  are  not  Uke  this,  but  we  assume  it  for  simphcity's  sake 
as  an  hypothesis."     He  further  comments  : 

"  First.  It  has  often  been  put  forward,  not  as  a  theory 
of  the  princij)al  causes  ali'ectiug  wealth  in  certain  societies, 
but  as  a  theory  of  the  principal,  sometimes  even  of  all,  the 
causes  aifecting  wealth  in  every  society.  And  this  has  oc- 
casioned many  and  strong  doubts  about  it.  .  .  .  No  doubt 
almost  every  one — every  one  of  importance — has  admitted 
that  there  is  a  friction  in  society  which  counteracts  the 
effect  of  the  causes  treated  of.  .  .  .  Now,  /  hold  these 
causes  are  only  the  m  ain  ones  in  a  single  hind  of  society — 
a  society  of  (jr own-up^  competitive  commerce,  such  as  we 
have  in  England  ',  that  it  is  only  in  such  societies  that  the 
other  and  counteracting  forces  can  be  set  together  under 
the  minor  head  of  'friction,'  but  that  in  other  societies 
there  are  other  causes,  in  some  cases  one,  and  in  some  an- 
other are  the  most  effective  ones,  and  that  the  greatest  con- 
fusion arises  if  you  try  to  fit  on  uneconomical  societies  the 
theories  only  true  of,  and  only  proved  as  to,  economical 
ones.  We  need  not  that  the  authority  of  political  economy 
should  be  impugned,  but  that  it  should  be  minimized. 

"  Secondly.  I  think,  in  consequence  of  this  defect  of 
conception,  economists  have  been  far  more  abstract,  and  in 
consequence  much  more  dry,  than  they  need  have  been.  If 
they  had  distinctly  set  before  themselves  that  they  were 
dealing  only  in  causes  of  wealth  in  a  single  set  of  societies, 
they  might  have  effectively  pointed  their  doctrines  with 
facts  from  their  societies.  But  so  long  as  the  vision  of 
universal  theory  vaguely  floated  before  them,  they  shrank 
from  particular  illustrations. 


WHO   IS   BOUND   CY   THE   SCIENX'E.  QQ 

"  Thirdlj.  It  is  also  in  consequence,  as  I  imagine,  of 
this  defective  conception  of  the  science,  that  English  econ- 
omists have  not  been  as  fertile  as  they  should  have  been  in 
verifying  it.  They  have  been  too  content  to  remain  in  the 
'  abstract '  and  to  slu'ink  from  concrete  notions,  because 
they  could  not  but  feel  that  many  of  the  most  obvious  phe- 
nomena of  many  nations  did  not  look  muck  like  their  ab- 
stractions. ...  If  you  try  to  give  a  tmiversal  reason  why 
nations  are  poor  and  why  nations  are  rich,  you  will  not  be 
able  to  arrive  at  any  useful  answer.  Some  wall  be  poor 
because  they  are  cooped  up  on  poor  soil ;  some  because 
they  have  a  religion  which  disinclines  them  to  make  money ; 
some  because  they  have  ancient  rules,  wliicli  helped  them 
to  make  a  beginning  but  now  retard  them ;  some  because 
they  have  never  been  able  to  make  a  beginning,  and  many 
other  causes  might  be  given.  Tlie  problem  taken  tip  in 
that  form  is  indeterminate  ;  why  nations  are  rich  or  poor 
depends  on  the  whole  intrinsic  nature  and  all  the  outward 
circumstances  of  such  nations.  There  is  no  simpler  for- 
mula to  be  discovered,  and  a  science  which  attempted  to 
find  one  would  of  necessity  have  to  deal  with  the  whole  of 
physical  science ;  it  would  be  an  account  of  all  men  and 
all  the  earth." 

This  is  something  in  quite  a  different  vein  from  the 
high-sounding  proclamation  of  Mr.  Lowe  (Lord  Sherbrooke) 
so  often  quoted  as  ending  all  controversy :  "  Political 
economy  belongs  to  no  nation ;  it  is  of  no  country.  It  is 
the  science  of  the  rules  for  the  production,  the  accumula- 
tion, the  distribution,  and  tlie  consumption  of  wealth.  It 
wall  assert  itself  whether  you  \^'ish  it  or  not.  It  is  founded 
on  the  attributes  of  the  human  mind,  and  no  power  can 
change  it." 

It  would  be  unjust  and  absurd  to  pretend  that  in  all 
these  years  the  economists  have  not  accumulated  a  large 


70  PROTECTION    VS.  FKEE   TRADE. 

body  of  related  facts,  gathered  from  observations  on  the 
conduct  of  man  in  the  social  state.  The  physical  order  in 
which  we  produce  exchangeable  commodities,  and  the  men- 
tal habits  which  so  order,  have  been  thrown  into  a  certain 
kind  of  correlation.  Certain  tendencies  have  been  detected, 
telling  the  average  of  human  conduct.  It  is  these  tenden- 
cies which  have  been  mistaken  for  "laws."  The  generah- 
zations  about  the  diiferent  forces  which  stimulate  us  to  ac- 
tion have  in  certain  aspects  more  or  less  truth  in  them. 
But  the  fundamental  and  fatal  error  in  the  English  school 
has  been  to  identify  a  single  one  of  these  forces  as  the  re- 
sultant of  them  all.  However  useful  and  meritorious  they 
may  have  been  as  first  attempts  to  untangle  the  causes  and 
sequence  of  economic  phenomena,  they  have  been  barren 
of  results,  and  still  remain  useless  terms  in  "  the  solemn 
Immbug  of  economic  orthodoxy." 

As  might  have  been  expected  after  a  curious  inquiry 
through  many  decades  into  the  reasons  for  the  totally  in- 
consequential character  of  the  science,  the  reasons  them- 
selves, at  last,  have  passed  into  the  alembic  of  final  anal- 
ysis. It  is  not  too  much  to  say  that,  at  last,  the  science  has 
been  subjected  to  a  destnictive  criticism.  This  it  has  re- 
ceived at  the  hands  of  Prof.  Chile  Leslie,  Mr.  Frederic 
Harrison,  and  Dr.  John  K.  Ingram — not  that  these  learned 
and  skillful  essayists  have  been  the  only  ones  to  put  the 
dissecting-knife  into  the  body  of  this  science,  but  it  is  to 
them  we  shall  principally  refer  in  reviewing  this  autopsy. 

M.  Comte,  in  the  course  of  the  long  and  friendly  corre- 
spondence which  took  place  between  John  Stuart  Mill  and 
himself,  first  pointed  out  the  utterly  inadequate  nature  of 
the  groundwork  of  the  science  of  political  economy  as 
such,  and  as  Mr.  Mill  had  expounded  it.  The  latter  was 
compelled  to  summon  all  the  resources  of  his  dialectic 
skill  in  reply. 


WUO   IS  COUXD   BY   THE   SCIENCE.  ^1 

In  M.  Comte's  conception  of  tlic  whole  line  of  inquiries 
involved  in  the  investigation  of  the  social  organism,  society 
should  be  contemplated  in  the  totality  of  its  elements.  ISi  o 
investigation  should  or  could  be  undertaken  into  any  por- 
tion of  these  elements,  except  in  constant  connection  with 
j^arallel  investigations,  carried  on  contemporaneously  into 
all  coexisting  portions  of  the  complex  whole.  The  facts 
of  wealth  are,  in  the  form  in  which  they  are  presented  to 
us,  so  inextricably  woven  with  facts  of  a  different  order — 
with  facts  of  the  intellectual,  moral,  and  political  order — 
that  the  determination  of  them  is  possible  only  when  con- 
sidered in  connection  with  associated  facts.  All  isolated 
study  is  doomed  to  failure,  and  consequently  a  science  of 
pohtical  economy  is  impossible.  The  method  of  dealing 
with  the  organic  world  and  the  inorganic  world  must  be 
different — the  former  must  be  dealt  with  as  an  ensemble. 

On  this  Frederic  Harrison  makes  this  comment :  '■'■Every 
organism  is  an  ensemble.  The  organic  means  something 
which  has  a  complex  function  over  and  ahove  any  of  its 
elements.  The  study  of  the  organism  is  the  study  of  this 
function.  Chemists  may  and  must  study  the  gastric  juices, 
but  generations  of  chemists  could  not  explain  the  physio- 
logical process  of  digestion.  Just  so,  a  pure  economist, 
studying  the  facts  of  wealth  apart,  gives  only  a  sort  of 
chemical  explanation  of  the  social  nutrition.  The  really 
organic  theory  of  this  function  of  the  social  system  he  is 
precluded  from  touching  by  the  very  terms  of  his  science. 
.  .  .  There  is  no  such  thing  in  nature  as  a  purely  indus- 
trial human  being ^  nor,  indeed,  any  purely  industrial  act. 
The  laws  of  the  industrial  nature  are  incapable  of  being 
stated,  except  with  or  in  terms  of  the  character  as  a  wholeP 

Stephen  Colwell,  the  writer  of  the  preliminary  essay  in 
the  American  edition  of  Frederick  List's  "  System  of  ]^a- 
tional  Economy,"  makes  his  criticism  to  the  like  effect : 


72  PROTECTION    VS.   FREE   TRADE. 

"  The  absurdity  of  divorcing  wealth  from  its  indispens- 
able union  with  human  interests,  and  from  its  dependence 
upon  considerations  and  motives  higher  than  wealth,  is  in 
no  respect  more  striking  than  in  the  attempt  to  separate 
it  from  national  polity  and  pohtics.  Whether  this  serious 
mistake  arose  from  the  exigencies  of  logic  or  from  neglect- 
ing the  distinction  between  science  and  art,  it  was  equally 
fatal  to  clear  perceptions.  The  assumption  that  the  whole 
range  of  interests  and  subjects  usually  embraced  in  politi- 
cal economy,  that  is,  all  that  relates  to  industry,  to  trade, 
and  social  amelioration,  should  be  withdrawn  from  the  do- 
main of  politics  and  from  the  discretion  of  legislators  and 
statesmen,  and  be  committed  to  political  economists,  was 
so  bold,  if  not  so  presumptuous,  that  it  could  not  have 
been  made  except  by  men  laboring  under  some  great  de- 
lusion ;  and  when  w^e  reflect  upon  the  unsettled  state  of 
the  science,  by  the  light  of  which  political  economists  in 
their  closets  were  to  decide  upon  the  well-being  of  millions 
upon  milUons  of  people,  and  upon  the  fate  of  nations,  we 
can  not  but  wonder  that  such  an  idea  was  ever  entertained 
for  a  moment  by  men  of  intelligence.  .  .  .  There  is  a  cer- 
tain order  of  minds  which,  abhorring  details  and  feeling 
unable  to  grapple  with  them,  gladly  take  refuge  in  rules 
and  generalities,  and  to  this  must  belong  those  who  imagine 
that  the  science  of  political  economy  is  entitled  to  take 
precedence  of  political  wisdom  and  experience." 

In  a  somewhat  similar  strain,  Prof.  Richards,  who  suc- 
ceeded Prof.  Senior  at  the  University  of  Oxford,  discloses 
the  opinion  of  a  man  who  knew  something  of  human 
affairs  :  "  It  is  well  known  that  JSTapoleon  Bonaparte,  who 
possessed  one  of  the  most  powerful  understandings  of 
modem  times,  entertained  a'  rooted  antipathy  to  pohtical 
economy.  It  was  a  saying  of  his  that  '  if  an  empire  were 
made  of  adamant,  the  economists  could  grind  it  to  powder.' 


WHO   IS   BOUND   BY   THE   SCIENCE.  73 

He  looked  upon  the  lucubrations  of  economical  writers  as 
he  looked  upon  one  of  the  ready-made  political  constitu- 
tions of  Abbe  Sieyes — as  an  artificial  creation  of  specula- 
tive brains.  He  regarded  them  as  a  collection  of  technical 
rules  and  dogmas,  devised  by  ingenious  theorists  and  men 
of  the  closet,  setting  up  to  instruct  the  rulers  of  mankind 
how  to  conduct  the  commercial  and  financial  affairs  of  their 
governments." 

In  1876  appeared  Prof.  Cliffe  Leslie's  interesting  article 
"  On  the  Philosophical  Method  of  Political  Economy."  It 
came  from  a  source  which  compelled  respect  and  atten- 
tion. We  can,  at  most,  indicate  the  points  at  which  he 
aimed  his  criticism.  His  aim  was  to  show  that  the  a  jprioi^i 
and  deductive  method  failed  to  throw  any  light  on  the 
nature  of  wealth,  its  differences  in  kinds  and  constituents, 
and  tliat  the  causes  which  affected  the  economiG  condition 
of  different  nations  at  different  times  must  he  sought  in 
the  entire  state  of  society ;  that  the  amount  of  wealth  de- 
pended on  the  conditions  determining  the  direction  and 
means  of  supply ;  that  the  distribution  of  wealth  was  not 
the  result  of  exchange  alone,  but  also  of  moral,  religious, 
and  family  ideas  and  sentiments,  and  the  whole  history  of 
a  nation : 

"  The  bane  of  political  economy  has  been  the  haste  of 
its  students  to  possess  themselves  of  a  complete  and  sym- 
metrical system  solving  all  problems  before  it  with  mathe- 
matical certainty  and  exactness.  The  very  attempt  shows 
an  entire  misconception  of  the  nature  of  those  problems, 
and  of  the  means  available  for  their  solution.  .  .  .  The 
truth  is,  that  the  whole  economy  of  every  nation,  as  re- 
gards the  occupation  and  pursuits  of  both  sexes,  the  nature, 
amount,  distribution,  and  consumption  of  wealth,  is  the  re- 
sult of  a  long  evolution,  in  which  there  is  both  continuity 
and  change,  and  of  which  the  economic  side  is  only  a 


74  PROTECTION    VS.  FREE  TRADE. 

particular  aspect  or  phase.  And  the  laws  of  which  it  is 
the  result  must  be  sought  in  history,  and  the  general  laws 
of  society  and  social  evolution. 

"  The  succession  of  the  hunting,  pastoral,  agricultural, 
and  commercial  states  is  commonly  referred  to  as  an  eco- 
nomic development,  but  it  is,  in  fact,  a  social  evolution,  the 
economical  side  of  which  is  indissolubly  connected  with 
its  moral,  intellectual,  and  political  sides}  To  each  of 
these  successive  states  there  is  a  corresponding  moral  and 
intellectual  condition,  with  a  corresponding  polity.  With 
the  changes  from  savage  hunting-life  to  that  of  the  nomad 
tribe,  thence  to  fixed  habitations  and  the  cultivation  of  the 
soil,  and  thence  to  the  rise  of  trade  and  towns,  there  are 
changes  in  feelings,  desires,  morals,  thought,  and  knowl- 
edge, in  domestic  and  civil  relations,  and  in  institutions 

'  Prof.  Sumner,  while  disclaiming  the  old  abstract  premises,  in  terms,  still 
travels  in  the  old  abandoned  a  priori  rut :  "  We  have  to  understand  that  an 
eco7iomic  investigation  may  be  carried  on  just  as  independently  as  a  chemical 
or  physical  or  biological  investigation.  The  economist  does  not  need  to  be 
on  the  lookout  all  the  time  to  correct  his  results  by  reference  to  some  outside 
considerations,  or  to  the  dogmas  of  jejune  and  rickety  systems  of  meta- 
physical speculation.  On  the  contrary,  he  should  regard  the  introduction  of 
extraneous  elements,  no  matter  under  what  high-sounding  names  of  moral., 
political,  and  social,  as  sure  signs  of  impending  confusion  and  fallacy." 
("Princeton  Review,"  March,  18S2.) 

We  leave  the  Professor  to  settle  that  with  Leslie,  Ingram,  and  Bagehot. 
His  form  of  economic  investigation  might  be  adequate  to  effect  the  imme- 
diate exchange  of  commodities  existing  on  a  given  day.  It  would  not  ac- 
count for  the  existing  stock,  nor  could  it  furnish  a  clew  to  the  nature  or. 
amount  for  to-morrow's  supply,  nor  where  to-morrow's  supply  was  to  come 
from.  A  given  kind  of  moral,  political,  and  social  man  must,  at  last,  be  a 
definite  kind  of  economic  man,  in  correspondence  with  himself.  His  wants 
are  peculiar  to  his  traits,  and  the  preparation  to  meet  them  must  grow  out  of 
his  environment.  You  can  not  expect  a  human  being,  with  one  sort  of  apti- 
tudes, to  go  off  and  live  in  a  part  of  the  world  and  in  pursuits  which  do  not 
engage  those  aptitudes.  He  will  make  the  arena  of  his  struggle  such  that  it 
will  engage  his  best  efforts,  physical,  mental,  and  moral.  Then  the  economic 
results  will  take  care  of  themselves. 


WHO   IS   BOUND   BY   THE   SCIENCE.  75 

and  cnstoms,  wliicli  show  themselves  in  the  economic  struct- 
ure of  the  community,  and  the  nature,  amount,  and  dis- 
tribution of  wealth.  .  .  .  A  i^riori  political  economy  has 
sought  to  deduce  the  laws  which  govern  the  directions  of 
human  energies,  the  division  of  employment,  the  modes  of 
production,  and  the  nature,  amount,  and  distribution  of 
wealth,  from  an  assumption  respecting  the  cause  of  con- 
duct prompted  by  individual  interest ;  but  the  conclusion 
which  the  study  of  society  makes  every  day  more  irresisti- 
ble is  that  the  germ  from  which  the  existing  economy  of 
every  nation  has  been  evolved  is  not  the  individual,  still 
less  the  mere  personification  of  an  abstraction,  but  ilie primi- 
tive community — a  community  one  in  hlood,  property^ 
thought,  morcd  responsiljility,  and  manner  ^  Z?/^,  and  that 
individual  interest  itself,  and  the  desires,  aims,  and  pur- 
suits of  every  man  and  woman  in  the  nation,  have  been 
molded  by  and  received  their  direction  and  form  from 
the  history  of  that  community. 

"  Both  the  desires  of  which  wealth  of  different  kinds 
is  the  object,  and  those  which  compete  with  them,  are  in 
every  nation  the  results  of  its  historical  career  and  state  of 
civilization.  What  are  called  economic  forces  are  not  only 
connected,  but  identical  with  forces  which  are  also  inoral 
and  intellectual.  .  .  .  Recent  aj^ologists  for  the  a  p7'iori 
and  abstract  method  of  economic  reasoning  feel  themselves 
constrained  to  confine  its  application  to  the  most  advanced 
stage  of  commercial  society ;  they  seem  even  prepared  to 
concede  its  inapplicahility  to  every  country  save  England, 
and  to  confine  it  to  the  latest  development  of  English  econ- 
omy. .  .  .  They  thus  abandon  at  once  the  claim  formerly 
made  on  behalf  of  political  economy  to  the  character  of  a 
universal  science  founded  on  invariable  laws  of  nature.  .  .  . 
It  is,  in  fact,  as  inapplicable  to  the  most  advanced  stage  of 
commerce  as  to  that  primitive  state  of  nature  from  which 


Y6  PROTECTION    VS.   FREE   TRADE. 

Eiearclo  deduced  it,  ])y  a  process  wliich  deserves  a  higli 
place  in  the  liistory  of  fallacies ;  and  which  was  not  pres- 
ent to  Mill's  mind  when  arguing  that  '  no  pohtical  econo- 
mists pretend  that  the  laws  of  wages,  profits,  values,  prices, 
and  the  like,  set  down  in  their  treatises,  would  be  strictly- 
true,  or  many  of  them  true  at  all,  in  the  savage  state.  .  .  . 
Every  successive  stage — the  hunting,  the  pastoral,  the  agri- 
cultural, the  commercial  stages,  for  example — has  an  econ- 
omy which  is  indissolubly  connected  with  the  physical, 
intellectual,  moral,  and  civil  development ;  and  the  eco- 
nomical development  of  English  society  at  this  day  is  the 
outcome  of  the  entire  movement  which  has  evolved  the 
political  constitution,  the  structure  of  the  family,  the  forms 
of  religion,  the  learned  professions,  the  arts  and  sciences, 
the  state  of  agriculture,  manufactures,  and  commerce.  The 
philosophical  method  of  political  economy  must  be  one 
which  expounds  this  evolution."  Such  an  exposition  would 
be  the  science  of  sociology. 

Then  came  the  address  of  John  K.  Ingram,  LL.  D.,  on 
"  The  Present  Position  and  Prospects  of  Political  Econ- 
omy," read  in  1878  before  the  British  Association  for  the 
Advancement  of  Science.  It  assailed  with  great  skill  and 
vigor  the  current  political  economy  on  four  grounds  : 

First.  The  attempt  to  isolate  the  study  of  the  facts  of 
wealth  from  that  of  other  social  phenomena. 

Secondly.  The  metaphysical  or  viciously  abstract  char- 
acter of  many  of  the  conceptions  of  the  economists. 

Thirdly.  The  abusive  preponderance  of  deduction  in 
their  processes  of  research ;  and 

Fourthly.  The  too  abstract  way  in  which  their  conclu- 
sions are  conceived  and  enunciated. 

It  will  be  impossible  to  indicate  the  acute  and  searching 
analysis  to  which  he  subjected  orthodox  economy  by  any  de- 
tached extracts.     His  general  conclusions  were  that  the  re- 


WHO  IS  BOUND  BY  TDE  SCIENCE.  77 

suits  arrived  at  by  tlic  dominant  scliool  need  not  be  thrown 
away  as  valueless ;  that  they  shed  important  partial  lights  on 
human  affairs,  and  afforded  salutary  partial  guidance  to  pub- 
lic action.  The  task  incumbent  on  sociologists  in  general 
was  to  incoi-porate  the  truths  already  elicited  into  a  more 
satisfactory  body  of  doctrine,  in  which  they  will  be  brought 
into  relation  with  the  general  theory  of  social  existence, 
and  to  utilize  such  materials  as  their  predecessors  had  accu- 
mulated. The  current  economy  was  provisional  and  pre- 
paratory, and  was  not  entitled  to  acceptance  if  regarded  as 
a  final  systematization  of  the  industrial  laws  of  society :  "  In 
human  affairs  it  is  in  general  impossible  to  solve  special 
questions  correctly  without  just  conceptions  of  enseiii- 
hle — all  particular  problems  of  government,  of  education, 
of  social  action,  whatever  kind  connect  themselves  with 
the  largest  ideas  concerning  the  fundamental  constitu- 
tion of  society,  its  spontaneous  tendencies,  and  its  moral 
ideals." 

This  address  was  received  with  sullen  respect.  Mr. 
Lowe  came  to  the  rescue.  lie  was  more  especially  con- 
cerned to  defend  Adam  Smith,  who,  he  conceived,  had 
been  attacked  in  the  strictures  on  the  deductionists.  But, 
in  truth,  Adam  Smith  had  never  pretended  to  deduce  the 
science  from  the  assumption  of  the  "  desire  of  wealth  and 
aversion  to  labor."  This  had  been  the  attempt  of  his  suc- 
cessors. Because  the  "Wealth  of  N^ations"  was  mainly 
the  result  of  observation  and  classification  and  not  of  de- 
ductive reasoning,  it  had  been  indicated  by  Dr.  Ingram  as 
a  proper  basis  for  a  real  science  of  sociology. 

"A  science  is  not  created  by  adducing  arguments  to 
show  that  it  is  possible,"  says  Mr.  Lowe.  "  The  '  "Wealth 
of  N^ations '  does  not  owe  its  success  to  a  peculiar  method 
of  treatment,  but  to  the  peculiar  nature  of  the  subject  of 
which  it  treats.  .  .  .  All  that  political  economy  pretends 


78  PROTECTION    VS.  FREE  TRADE. 

to  is  that  wlien  and  in  proportion  as  tliese  tilings  "  (labor, 
wages,  rent,  commerce,  taxes)  "come  into  existence,  tlie 
principles  wliicli  apply  to  tliem  come  into  existence  also, 
and  that,  though  as  society  becomes  more  cumphcated  these 
things  become  complicated  too,  they  do  not  change  their 
natm-e,  but  retain  the  qualities  with  which  they  were  origi- 
nally imbued.  There  is  a  point  where  the  doctrine  of 
laissez  faire  ceases  to  be  applicable,  as  in  the  case  of  chil- 
di'en.  .  .  .  As  to  the  future  of  political  economy,  I  do  not 
profess  to  be  very  sanguine  that  many  new  or  striking  dis- 
coveries are  in  reserve  for  it.  If  I  have  stated  correctly 
the  cause  of  its  success,  any  attempt  to  widen  its  field  will 
only  deprive  it  of  that  basis  of  certainty  which  it  derives 
from  the  practical  uniformity  of  the  feelings  and  wishes 
of  mankind  in  regard  to  wealth.  The  future  is  all  for 
the  sociologists,  and  I  am  inclined  to  think  it  will  remain 
so." 

After  speaking  of  its  brilliant  and  lasting  successes  as 
compared  with  other  moral  sciences,  he  adds :  "  To  the 
labors  of  these  men,  whose  methods  are  so  erroneous,  we 
owe,  among  other  things,  the  repeal  of  hundreds  of  galling 
taxes  on  almost  all  the  comforts  of  life  and  on  the  food  of 
the  people — the  repeal  of  the  corn  and  navigation  laws, 
etc.  Those  are  some  of  the  achievements  of  the  past,  and 
I  may  be  excused  if  I  prefer  them  to  the  shadowy  and  un- 
realized anticipations  of  the  future."  To  which  Prof. 
Leslie  replies  that  these  achievements  which  Mr.  Lowe  ar- 
rogates were  not  triumphs  "  for  his  own  economic  method. 
Those  he  refers  to  were  achieved  by  the  opposite  inetliod 
of  reasoning  from  observation  and  experienced  ^ 

1  "  But  it  is  obvious  tbat,  while  free  trade  was  being  introduced  into  Eng- 
land, many  other  causes  of  prosperity  were  also  coining  into  action — the 
progress  of  invention,  the  construction  of  railways,  the  profuse  consumption 
of  coal,  the  extension  of  the  colonies,  etc.,  etc.     Although,  then,  the  beneficent 


WHO  IS  BOUND  BY   THE   SCIENCE.  79 

So,  then,  the  free-trade  legislation  of  England  has  not 
grown  out  of  the  body  of  doctrine  which  constitutes  the 
modern  English  political  economy.  Prof.  Leslie  says  dis- 
tinctly that  the  most  arduous  problem  respecting  the  sepa- 
ration of  occupations,  namely,  "  What  are  the  causes  gov- 
erning its  actual  course,  determining  the  direction  of  the 
national  energies,  the  employments  of  different  classes  and 
of  both  sexes  in  different  ages  and  countries?"  has  never 
even  occurred  to  the  deductive  school. 

The  economic  structure  of  any  given  community,  the 
direction  taken  by  national  energies,  the  occupation  of  the 
different  classes  and  of  both  sexes,  the  constituents  and  the 
partition  of  movable  and  immovable  property,  the  pro- 
gressive, stationary,  or  retrogressive  condition  in  respect 
to  productive  power,  and  the  quantity  and  quahty  of  the 
necessaries,  comforts,  and  luxuries  of  life,  are  insoluble  by 
the  science  of  political  economy.  Why?  Because  these 
are  "  the  results  not  of  special  economic  forces,  but  of  all 
the  social  forces,  political,  moral,  and  intellectual  as  well 
as  industrial."  The  inquiry,  then,  is  a  national  one.  We 
have  escaped  the  weak,  purposeless  conclusions  suggested 
by  cosmopolitanism.  Every  distinct  community,  society, 
state,  nation,  every  political  entity,  is  to  be  discussed 
as  an  industrial  entity.  It  is  impossible  to  conceive  of 
the  terais  of  an  industrial  economic  problem  except  under 
the  condition  of  nationality.  The  only  universal  princi- 
ples of  pohtical  economy  assumed  or  established  are  as 
applicable  to  men  in  a  savage  state  as  in  the  civilized  state. 
"Exchange"  goes  on  in  one  exactly  as  the  other — the 
eternal  laws  of  value  are  as  true  in  Patagonia  as  in  France. 

results  of  free  trade  are  great  and  unquestionable,  they  could  hardly  be  found 
to  exist  a  posteriori.'''' — Jevons,  "  Theory  of  Political  Economy,"  p.  20.  Prof. 
Jevons  omits  the  great  factor — the  discovery  of  gold  in  Australia  and  Cali- 
fornia. 


80  PROTECTION    VS.  FREE  TRADE. 

The  dinerence  between  ci\dlization  and  barbarism  lies  in 
the  desires  to  be  satisfied,  tlie  things  to  be  exchanged,  and 
their  mode  of  production.  These  depend  on  moral,  intel- 
lectual, and  political  considerations  as  well  as  economic. 
If,  then,  they  are  to  be  ascertained,  we  must  part  com- 
pletely with  the  old  friends  with  whom  we  started  out, 
from  Prof.  Senior  to  Prof.  Perry.  "The  science  of  ex- 
changes" is  of  no  help  to  us  in  the  business  of  nation- 
making. 

Mr.  Mill  has  pointed  out  the  fallacy  of  treating  political 
economy  as  the  "  science  of  exchanges."  That  definition 
"  omits  the  most  important  condition  determining  the  pro- 
duction of  wealth,  and  overlooks  the  trath  that  human  in- 
stitutions, laws  of  property  and  succession,  are  necessarily 
chief  agencies  in  determining  its  distribution."  If  the 
science  of  English  political  economy  has  not  served  to 
guide  English  statesmen  in  the  affairs  of  England,  it  will 
not  serve  to  guide  American  statesmen  in  the  conduct  of 
the  affairs  of  America.  If  English  statesmen  at  last  fall 
back  on  "  observation  and  experience  "  of  English  facts  in 
the  conduct  of  English  industry  and  commerce,  American 
statesmen  will  be  compelled  to  fall  back  on  '*  obsei*vation 
and  experience  "  in  the  conduct  of  American  industry  and 
commerce.  As  between  free  trade  and  protection,  we  have 
not  seen  as  yet  in  this  hasty  review  what  course  "  observa- 
tion and  experience"  will  commend  to  us.  There  is  an 
end,  however,  to  the  conceit  and  dogmatism  which  asserts 
that  there  are  any  irrepealable  "  laws  "  of  political  economy 
of  universal  application,  a  science  which  "belongs  to  no 
nation,  is  of  no  country,"  which  must  dominate  our  pol- 
icy. We  certainly  have  reached  no  standing-room  in  any 
science  which  reverses  the  judgment  which  Prof.  Senior 
puts  in  the  mouth  of  Xapoleon,  viz. :  "  That  he  believed 
free  trade  between  independent  states  to  be  like  gambling 


"WHO  IS  BOUND  EY  THE  SCIENCE.  gl 

between  individuals,  and  therefore  miscliievous  to  the  one 
or  the  other ;  mischievous,  in  fact,  to  the  one  which,  in 
the  ultimate  settling  of  accounts,  had  to  pay  a  balance  in 
money." 

We  have  found  nothino;  which  justly  enables  Prof. 
Perry  to  say  of  Daniel  Webster  and  his  speech  on  the 
tariff  in  1828,  "  He  then  and  afterward  brought  forward 
in  defense  of  protection  arguments  which  political  economy 
pronounces  unsound  "  : 

Nothing  which  convicts  M.  Thiers  of  false  economics 
when,  in  answer  to  the  question,  "  AYhy  do  yoa  give  these 
bounties  to  the  French  sugar-refineries  ? "  he  replied,  "  I 
wish  the  tall  chimneys  to  smoke  "  : 

Nothing  to  disarm  the  criticism  which  Mr,  Bagehot 
says  foreigners  make  to  English  free-traders :  "  Your  Eng- 
lish traders  are  strong  and  rich ;  of  course,  you  wish  to  un- 
dersell our  traders,  who  are  weak  and  poor.  You  have  in- 
vented this  political  economy  to  enrich  yourselves  and  ruin 
us  ;  ice  will  see  that  you  do  not  do  soP 

We  have  seen  that  not  a  few  of  the  "  respectable  pro- 
fessors of  the  dismal  science  "  have  been  reached  by  the 
words  of  Mr.  Carlyle: 

"  For  many  sins  I  have  read  much  in  those  inimitable 
volumes  of  yours ;  really,  I  should  think,  some  barrowsf  ul 
in  my  time — and,  in  these  last  forty  years  of  theory  and 
practice,  have  pretty  well  seized  what  of  Divine  message 
you  were  sent  with  to  me.  Perhaps  as  small  a  message, 
give  me  leave  to  say,  as  ever  there  was  such  a  noise  made 
about  before.  Professors  of  the  dismal  science,  I  perceive 
that  the  length  of  your  tether  is  now  pretty  well  run,  and 
that  I  must  request  you  to  talk  a  little  lower  in  future." 

The  topics  and  the  order  of  their  exposition  adopted  by 
Adam  Smith  have  been  followed  by  almost  all  subsequent 
writers.     This  will  appear  from  the  table  of  contents  of 


32  PROTECTION    VS.  FREE  TRADE. 

tlie  "  Wealtli  of  Nations,"  ^  wliich  is  given  below.  It  will 
be  noted  that  the  larger  portion  of  his  work  is  merely  de- 
scriptive of  what  happens  in  the  course  of  the  business  of 
men,  and  the  order  in  which  external  things  follow  each 

1  "The  Wealth  of  Nations" — its  table  of  contents: 
BOOK  I. 

Of  the  causes  of  improvement  in  the  productive  power  of  labor,  and  of  the 
order  according  to  which  its  produce  is  naturally  distributed  auiong  the  dif- 
ferent ranks  of  the  people. 
Chapter  1.     Of  the  division  of  labor. 

(As  domestic  exchanges  grow  out  of  the  divisions  of  callings,  trades,  and 
pursuits  in  which  men  render  services  to  each  other,  so  foreign  commerce  has 
its  origin  in  a  kind  of  "  international  division  of  labor  "  in  which  the  differ- 
ent nations  enter  upon  the  production  of  the  commodities  in  which  respect- 
ively they  have  some  absolute  or  relative  advantage  over  each  other.) 
Chap.  2.     Of  the  principles  which  give  occasion  to  the  division  of  labor. 
Chap.  3.     Division  of  labor  is  limited  by  the  extent  of  the  market. 
Chap.  4.     Of  the  origin  and  use  of  money. 
Chap.  5.     Of  the  real  and  nominal  price  of  commodities,  or  of  their  price  in 

labor  and  their  price  in  money. 
Chap.  6.     Of  the  component  parts  of  the  price  of  commodities. 
Chap.  7.     Of  the  natural  price  and  market  price  of  commodities. 
Chap.  8.     Of  the  wages  of  labor. 
Chap.  9.     Of  the  profits  of  stock.     (Capital.) 

Chap.  10,  Of  wages  and  profits  in  the  different  employments  of  labor  and 
stock. 

Chap.  11.  Of  rent  of  land. 

BOOK  II. 

Chap.  1.     Of  the  divisions  of  stock. 

Chap.  2.  Of  money  as  a  particular  branch  of  the  general  stock  of  the  so- 
ciety. 

Chap.  S.  Of  the  accumulation  of  capital — or  of  productive  and  unproductive 
labor. 

Chap.  4.     Of  stock  lent  at  interest. 

Chap.  5.     Of  the  different  employments  of  capital. 

BOOK  III. 
Chap.  1.     Natural  progress  of  opulence. 

(This  chapter  is  mainly  historical.     It  goes  into  the  discouragement  of 
agriculture  in  Europe  after  the  fall  of  the  Roman  Empire,  the  rise  and  prog- 


WHO  IS  BOUND  BY  THE  SCIENCE.  83 

other.  It  is  the  work  of  a  close  observer,  simply.  When 
he  comes  to  his  deductions  from  human  nature — from  the 
universality  and  intensity  of  the  desire  of  each  man  to 
promote  his  pecuniary  interest — he  assumes  as  a  fact  what 
even  his  most  loyal  disciples  have  advanced  as  an  assump- 
tion only.  As  has  been  observed,  "  Adam  Smith  thought 
there  was  a  Scotchman  inside  every  man." 

Adam  Smith  attacked  with  great  vigor  the  colonial 
system  of  England.  While  England,  for  commercial  and 
djmastic  reasons,  was  girdling  the  earth  with  her  colonial 

res3  of  cities  and  towns,  and  how  the  commerce  of  the  towns  contributed  to 
the  improvement  of  the  country.) 

BOOK  IV. 
Chap.  1.     Of  the  principles  of  the  commercial  or  mercantile  system. 

(The  doctrine  erroneously  imputed  to  the  mercantile  school  was  that 
money  was  the  only  wealth,  and  that  the  gains  in  foreign  trade  would  be 
largest  when  the  exports  most  greatly  exceeded  the  imports,  and  when  the 
balance  was  paid  in  money,  gold  or  silver.  Adam  Smith's  doctrine  was  that 
wealth  consisted  chiefly  in  consumable  commodities — in  what  he  calls  "  the 
necessaries,  conveniences,  and  luxuries  of  life,"  and  not  solely  in  money. 
Trade-balances  may  turn  against  a  nation — to  pay  them,  the  nation  may  be 
drained  of  specie ;  whether  it  leads  to  panic,  commercial  crises,  destruction 
of  industries,  depends  on  a  variety  of  co-operating  causes.  This  is  not  the 
place  to  go  into  this.  In  the  long  run  the  imports  and  exports  of  a  nation 
must  balance.  "Products  in  market  are  a  market  for  products";  "if  a  na- 
tion will  not  buy  of  foreigners,  it  can  not  sell  to  them  " ;  "  if  foreigners  will 
not  buy  of  a  nation,  it  can  not  buy  of  them,"  are  different  sides  of  the  same 
truth.  The  mercantile  system  is  no  part  of  the  protectionist's  political 
economy.) 
Chap.  2.     Of  restraints  upon  the  importation  from  foreign  countries  of  such 

goods  as  can  be  produced  at  home. 
Chap.  3.     Of  the  extraordinary  restraints  upon  the  importation  of  goods  of 
almost  all  kinds  from  those  countries  with  which  the  balance  is  sup- 
posed to  be  disadvantageous. 
Chap.  4.     Of  drawbacks. 
Chap.  5.     Of  bounties. 
Chap.  6.     Of  treaties  of  commerce. 
Chap.  7.     Of  colonies. 


84  PROTECTION    VS.  FREE   TRADE. 

acquisitions,  Adam  Smith  contemplated  them  from  the 
commercial  stand-point  alone.  He  saw  that  the  effort  was 
to  provide  in  the  colonies  a  market  for  English  manufact- 
ures, and  to  make  them  sources  of  supply  for  food  and  raw 
materials.  This  was  the  purpose  of  the  restrictions  which 
England  everywhere  imposed  upon  the  colonies,  by  positive 
enactments  and  trade  regulations.  These  American  colo- 
nies were  brought  under  the  dominion  of  British  nile  not 
less  by  parliamentary  bonds  growing  out  of  political  sover- 
eignty than  by  economic  fetters  growing  out  of  mercantile 
theories.  The  Navigation  Act,  passed  in  the  middle  of  the 
seventeenth  century,  made  everything  on  the  land  and  on 
the  seas  tributary  to  the  mother-country.  At  last  the 
iVmerican  Revolution  came — evolved  from  a  long  series  of 
events  possessing  political  and  economic  significance. 

"  American  independence,  like  the  great  rivers  of  the 
country,  had  many  som-ces,  but  the  head-spring,  which 
colored  all  the  stream,  was  the  Navigation  Act,"  says  Mr. 
Bancroft.  It  is  doubtful  if  Adam  Smith  had  any  concep- 
tion of  the  maj'velous  development  of  industnes  which  this 
century  has  seen,  and  that  England  would  become  the 
workshop  of  the  world,  and  must  be  compelled  to  buy  the 
food  which  supported  her  workmen.  Indeed,  he  says  :  "  to 
expect  that  the  freedom  of  trade  should  ever  be  entirely 
restored  in  Great  Britain  is  as  absurd  as  to  expect  that  an 
Oceania  or  Utopia  should  now  be  established  in  it,"  and 
that "  her  master  manufacturers  would  set  themselves -against 
every  law  which  is  likely  to  increase  the  number  of  rivals 
in  the  home  market."  But  the  day  came  when,  under  the 
facts  of  English  history,  it  seemed  sound  political  economy 
for  those  same  English  "  master  manufacturers  "  to  invoke 
the  help  of  free-trade  policies.  It  turned  out,  apparently, 
that  the  theory  of  free  trade,  put  into  practice,  would  work 
for  British  manufacturers  and  American  food-raisers,  in  the 


WHO   IS  BOUND   BY   THE   SCIENCE.  85 

nineteentli  century,,  tlie  precise  economical  results  v/liich 
commercial  restrictions  and  parliamentary  statutes  Lad 
worked  between  the  mother-country  and  her  colonies  in 
the  eighteenth  century.  The  political  rebelUon  and  the 
economic  rebellion  had  their  origin  at  the  same  source. 
The  remedy  for  the  double  mischief  lies,  still,  in  political 
and  industrial  freedom — unrestricted  freedom  of  produc- 
tion between  the  fifty  millions  of  the  citizens  of  the  new 
republic.  Free  trade  with  England  restricts  our  industries 
and  our  domestic  exchanges  in  the  same  sense,  and  with  the 
same  economic  results,  which  the  false  application  of  the 
Mercantile  Theory  did.  The  unrestricted  workings  of  free 
trade  with  England  operated  upon  us  in  the  same  manner, 
and  to  the  full  measure  of  subjugation  which  accompanied 
the  omnipotence  of  the  parliamentary  decree. 

In  the  foregoing  view  of  the  "  Wealth  of  Xations,'-  we 
are  fairly  in  possession  of  the  field  of  the  science  of  political 
economy.  It  is  aside  from  any  useful  purpose  to  go  on  and 
indicate  any  one  of  the  "  ninety-odd  blunders  and  fallacies  " 
which  have  been  attributed  to  that  work.  They  do  not 
touch  our  controversy ;  they  only  go  to  the  vahdity  of  the 
claims  which  the  science  may  set  up  to  be  a  science. 

On  two  points  of  some  relevancy  I  venture  to  adopt  the 
crititjism  of  Mr.  Bagehot : 

"  But,  when  we  pass  from  the  refutation  of  ancient 
errors  (especially  the  error  that  wealth  consists  solely  in 
money,  or,  in  gold  and  silver)  to  the  estabhshment  of  co- 
herent truth,  we  shall  not  be  equally  satisfied.  Students 
are,  indeed,  still  sometimes  told  that  they  will  find  such  a 
truth  in  Adam  Smith ;  but  those  who  had  nothing  else  to 
read,  and  who  wanted  to  read  accurately,  did  not  find  it  so. 
What,  in  fact,  a  student  will  find  in  Adam  Smith,  is  a  rough 
outhne  of  sensible  thoughts,  not  always  consistent  with 
themselves,  and  rarely  stated  with  much  precision,  often 


86  PROTECTION    VS.  FREE  TRADE. 

very  near  the  truth,  though  seldom  precisely  hitting  it ;  a 
great  mental  effort  in  its  dayp  though  often  deficient  in  the 
consecutiveness  required  by  careful  learners,  and,  except 
for  the  purpose  of  exciting  an  interest  in  the  subject,  alto- 
gether superseded  and  surpassed  now." 

Adam  Smith  made  a  serious  attempt  to  demonstrate 
that  "  the  capital  employed  in  agriculture  not  only  puts 
into  motion  a  greater  quantity  of  productive  labor  than  any 
equal  capital  employed  in  manufactures,  but  in  proportion, 
too,  to  the  quantity  of  productive  labor  which  it  employs, 
it  adds  a  much  greater  value  to  the  annual  produce  of  the 
land  and  labor  of  the  country,  to  the  real  wealth  and  rev- 
enue of  its  inhabitants." 

Mr.  Bagehot's  comment  is :  "  In  fact,  probably  few  pas- 
sages in  so  eminent  a  writer  on  the  subject  for  which  he 
is  eminent,  contain  so  much  curious  falsehood.  If  nature 
does  nothing  in  manufactures,  in  what  is  it  that  it  does 
anything?  Manufactures  are  but  applications  of  natural 
forces,  just  as  agriculture  is  another  application,  and  the 
reasoning  assumes  that  the  natural  causes  which  produce 
dear  things  are  more  beneficial  to  mankind  than  those 
which  produce  cheap  things,  though,  had  Adam  Smith 
seen  that  he  was  making  such  an  assumption,  he  would 
have  been  the  first  to  reject  it." 

A  successful  attempt  to  refute  Adam  Smith's  doctrine 
was  made  by  Alexander  Hamilton  in  his  celebrated  "  Re- 
port on  the  Treasury  in  1T91." 

Of  Adam  Smith's  exposition  of  the  causes  which  give 
exchangeable  value  to  commodities — the  central  inquiry  in 
the  whole  science — Mr.  Bagehot  says :  "  Although,  there- 
fore, Adam  Smith  had  the  merit  of  teaching  the  world 
that  the  exchangeable  value  of  commodities  is  propor- 
tioned to  the  cost  of  their  production,  his  analysis  of  tliat 
cost  was  so  very  defective  as  to  throw  that  part  of  pohtical 


WHO  IS  EOUND  BY  THE  SCIENCE.  87 

economy  into  great  confusion  for  many  years,  and  as  quite 
to  prevent  his  teaching  being  used  as  an  authority  upon  it 
now." 

These  extracts  are  made  at  some  length,  for  the  reason 
that  the  general  public  is  probably  not  aware  of  the  force 
and  destructiveness  with  which  the  science  has  been  analyzed 
and  criticised.  The  political  economy  of  the  future  will 
possess  an  entire  change  of  sjjirit.  As  Prof.  Ely,  of  Johns 
Hopkins  University,  says  ("  The  Past  and  the  Present  of 
Political  Economy  ")  :  "  It  (the  younger  pohtical  economy) 
does  not  acknowledge  laissez-faire  as  an  excuse  for  doing 
nothing  while  the  people  starve,  nor  allow  the  all-sufficiency 
of  competition  as  a  plea  for  grinding  the  poor.  It  denotes 
a  return  to  the  grand  principle  of  common  sense  and 
Christian  precept.  Love,  generosity,  nobility  of  character, 
self-sacrilice,  and  all  that  is  best  and  truest  in  our  nature, 
have  their  place  in  economic  life." 


CHAPTER  Y. 

LAISSEZ    FAIKE — NOT   A    SCIENTIFIC   DOGMA. 

We  liave,  in  tliis  synoptical  view  of  society  in  its  efforts 
to  satisfy  its  various  desires,  seen  how  it  goes  about  the 
various  processes  of  production,  viewed  its  instmments  of 
production,  the  considerations  of  utihty,  of  value,  which 
put  them  in  0|)eration,  and  the  functions  of  money,  credit, 
and  so  on,  to  facilitate  their  exchange. 

Some  of  these  exchanges  terminate  in  the  procuring  of 
commodities  to  be  used  in  further  production,  and  the  ac- 
cumulation of  these  constitutes  capital,  the  result  of  parsi- 
mony, saving,  the  effectual  desire  of  accumulation — a  con- 
temjDlation  of  the  future  rather  than  the  present ;  other 
exchanges  terminate  in  the  gratification  of  the  passions  in 
jDrofligacy,  in  luxury,  in  charity,  in  objects  of  fashion  and 
distinction,  but  which  do  not  result  in  economic  gains,  that 
is,  "  wealth."  We  have  seen  the  process  by  which  individ- 
uals may  acquire  wealth.  Tliis  they  may  obviously  be  able 
to  do  either  by  the  creation  of  new  objects  having  exchange- 
able value,  or  by  the  acquisition,  from  other  people,  by  ex- 
change— by  a  sufficient  number  of  opportunities  to  "  buy 
cheap  and  sell  dear,"  or  by  the  socially  unprofitable  indus- 
try of  speculation.  A  nation,  a  people  as  such,  never  has 
and  never  can  get  rich  by  the  latter  method  alone.  Trad- 
ers may  get  rich  while  the  nation  as  a  whole  is  growing 
poorer. 

A  nation  must  acquire  wealth  by  the  increase  of  its 


LAISSEZ  FAIRE— NOT  A  SCIENTIFIC  DOGMA.  §9 

"  stock,"  by  making  new  things,  or  by  bringing  into  its 
boundaries  new  things,  possessing  exchangeable  value. 

Adam  Smith  has  said,  "  The  annual  revenue  of  every 
society  is  always  precisely  equal  to  the  exchangeable  value 
of  the  whole  annual  product  of  the  country,  or  rather,  is 
precisely  the  same  thing  as  that  exchangeable  value." 

We  have  as  yet  been  put  in  possession  of  no  tests  by 
which  we  may  ascertain  when  "  the  annual  revenue  of  the 
society "  is  at  its  greatest.  The  real  problem  is,  then,  to 
ascertain  how  the  industry  of  a  nation  may  be  made  to 
yield  the  greatest  annual  product.  The  economic  man  we 
have  been  contemplating  so  far  was  an  individual  with  a 
salable  thing  in  his  hands,  running  about  the  planet  to 
find  a  purchaser,  a  unit  doing  the  best  he  can  to  promote 
his  own  interests,  as  he  understands  them. 

We  now  find  him  a  member  of  a  society  in  which  his 
liberty  to  do  as  he  pleases  is  restrained  by  considerations 
of  what  is  called  the  general  welfare  of  that  society.  lie 
can  not  escape  the  limitations  which  his  citizenship  in  a 
definite  nation  puts  upon  him,  if  he  would,  and  there  can 
be  no  intelligent  apprehension  of  his  industrial  relations  to 
the  world,  except  as  a  member  of  that  society.  We  come 
then,  at  last,  upon  ground  which  contains  the  problem  in 
hand.  From  this  time  forward  we  shall  be  in  debatable 
territory.  Some  of  the  contentions  before  us  will  grow 
out  of  doctrine  and  some  out  of  facts.  We  may  as  well, 
then,  begin  at  the  beginning.  The  entire  premises  of  free 
trade  were  laid  by  Adam  Smith.  They  -will  be  found  in 
these  extracts  from  Book  IV,  "Wealth  of  JS'ations"  : 

"But  the  principle  which  prompts  us  to  save  is  the 
desire  of  bettering  our  condition ;  a  desire  which,  though 
generally  calm  and  dispassionate,  comes  with  us  from  the 
Womb,  and  never  leaves  us  until  we  go  into  the  grave.  In 
the  whole  interval  which  separates  these  two  moments, 


90  PROTECTION    VS.  FREE   TRADE. 

there  is  scarce  perhaps  a  single  instant  in  wliich  any  man 
is  so  perfectly  and  completely  satisfied  with  his  situation  as 
to  be  without  any  wish  of  alteration  or  imj^rovement  of 
any  kind.  ... 

"The  natural  effort  of  every  individual  to  better  his 
own  condition,  when  suffered  to  exert  itself  with  freedom 
and  security,  is  so  powerful  a  principle,  that  it  is,  alone 
and  without  any  assistance,  not  only  capable  of  carrying 
on  the  society  to  wealth  and  prosperity,  but  of  surmount- 
ing a  hundred  impertinent  obstructions  with  which  the 
folly  of  human  laws  too  often  encumbers  its  oiDcrations ; 
though  the  effect  of  these  obstructions  is  always,  more  or 
less,  either  to  encroach  uj^on  its  freedom  or  to  diminish  its 
security.  .  .  . 

"  Every  system  which  endeavors,  either  by  extraordinary 
encouragements  to  draw  toward  a  particular  species  of  in- 
dustry a  greater  share  of  the  capital  of  the  society  than 
what  would  naturally  go  to  it,  or  by  extraordinary  re- 
straints to  force  from  a  particular  species  of  industry  some 
share  of  the  capital  which  would  otherwise  be  employed  in 
it,  is  in  reality  subversive  of  the  great  purpose  which  it 
means  to  promote.  It  retards  instead  of  accelerating  the 
progress  of  society  toward  wealth  and  greatness,  and  di- 
minishes instead  of  increasing  the  real  value  of  the  annual 
produce  of  its  land  and  labor.  .  .  . 

"  All  systems,  either  of  preference  or  restraint,  being 
completely  taken  away,  the  obvious  and  simple  system  of 
natural  liberty  establishes  itself  of  its  own  accord.  Every 
man,  as  long  as  he  does  not  violate  the  laws  of  justice,  is 
left  perfectly  free  to  pursue  his  own  interest  in  his  own 
way,  and  to  bring  both  his  industry  and  capital  into  com- 
petition with  those  of  any  other  man  or  order  of  men. 
The  sovereign  is  completely  discharged  from  a  duty  in  at- 
tempting to  perform  which  he  must  always  be  exposed  to 


LAISSEZ  FAIRE— NOT  A  SCIENTIFIC  DOGMA.  91 

innumerable  delusions,  and  for  the  proper  performance  of 
which  no  human  wisdom  or  knowledge  could  ever  be  suffi- 
cient :  the  duty  of  superintending  the  industry  of  private 
people,  and  of  directing  it  toward  the  employments  most 
suitable  to  the  interests  of  society." 

It  is  not  certain  that  in  this  last  paragraph  Adam  Smith 
meant  more  than  that,  within  the  limits  of  a  given  nation, 
industry  and  trade  should  be  free.  In  paragraph  after 
paragraph  in  the  book  he  insists  on  the  supreme  importance 
of  the  domestic  commerce,  the  home  market,  and  to  an 
extent  which  has  met  with  dissent  from  many  of  his  more 
intensely  free-trade  followers.  When  he  wrote,  England 
was  filled  with  monopolies  holding  special  and  valuable 
privileges,  and  the  home  trade  was  under  many  systems  of 
preference  and  restraint  im]30sed  by  royal  hcense.  In  a 
country  in  which  absolute  free  domestic  trade  prevailed,  in 
which  the  industry  and  capital  of  each  is  in  perfectly  free 
competition  with  that  of  all,  as  in  the  United  States,  his 
criticisms  would  be  disarmed  of  their  force. 

But,  taking  the  widest  application  his  words  are  capa- 
ble of,  we  proceed  to  an  analysis  of  his  propositions.  They 
are  two : 

The  first  is,  that  men  are  purely  egoistic,  are  capable  of 
perfectly  perceiving  their  separate  interests,  and  are  not 
hindered  by  feelings  of  any  other  kind  from  their  pursuit. 

The  second  is,  that  every  man,  in  pursuing  his  own  ad- 
vantage, at  the  same  time  furthers  the  good  of  all. 

Together  they  constitute  the  doctrine,  which  is  the 
"  last  word  "  the  science  of  political  economy  has  to  utter, 
laissez  faire,  "  letting  things  alone,"  out  of  which  the  prac- 
tice of  free  trade,  it  is  insisted,  flows  with  scientific  rigor. 

His  economic  force  is  "  the  natural  effort  of  every  indi- 
vidual to  better  his  condition."  As  the  individual  achieves 
wealth,  the  society  will  be  carried  to  opulence  and  pros- 


92  PROTECTION    VS.   FREE   TRADE. 

peritj.  The  effort  to  "better  liis  condition"  is  at  last 
generalized  under  tlie  name  of  "wealtli,"  as  much  so  as 
that  of  the  Epicm'ean  under  the  name  of  pleasure.  Philo- 
sophically, this  is  materialism,  and  reduces  pohtical  econo- 
my to  a  theory  of  egoism. 

To  get  at  it,  we  are  invited  to  a  short  excursion  into 
metaphysics,  which  we  must  accept.  We  are  told  the  solu- 
tion lies  in  a  psychological  pool,  and  we  must  phmge  in. 
In  essence,  we  are  still  dealing  with  an  abstraction.  It 
greatly  simplifies  the  problem  if  we  conceive  of  man  as 
purely  selfish.  But  we  delude  ourselves  if  we  proceed  on 
this  assumption  as  the  principle  of  human  intercourse. 
This  is  to  confound  the  "  niles  of  the  market "  with  "  the 
rules  of  life" — with  the  elementary  laws  of  human  nature. 
The  simplification  is  carried  too  far. 

It  is  safe  to  say  that  society  could  not  exist  a  single  day 
with  this  one-sided  force  alone  in  operation. 

The  same  Adam  Smith  who  wrote  the  ""Wealth  of  Na- 
tions "  also  wrote  a  "  Theory  of  Morals."  In  this  treatise 
Sympathy  was  assumed  as  the  basis  of  moral  sentiments. 
Neither  selfishness  nor  sympathy  form  a  scientific  basis  for 
conduct.  "  In  the  race  for  wealth,  and  honors,  and  prefer- 
ments, he  may  run  as  hard  as  he  can  and  strain  every  nerve 
and  every  muscle  in  order  to  outstrip  all  his  competitors,  but 
if  he  should  jostle  or  throw  down  any  of  them,  the  indulgence 
of  the  spectators  is  entirely  at  an  end,"  says  Adam  Smith. 

Justice,  then,  is  a  constituent  in  conduct,  and  con- 
science, even  if  it  be  only  the  sense  of  "  tribal  approval  or 
disapproval."  It  takes  effect  as  an  ingredient  in  the  "  con- 
dition "  which  we  desire  "  to  better."  The  family  is  a 
relation  in  which  egoism  is  largely  substituted  by  altruism. 
In  a  less  degree,  the  nation  is  an  instance,  for  we  suppose 
there  is  such  a  sentiment  as  patriotism.  The  sense  of 
community  is  an  effective  and  ever-present  force,  economic 


LAISSEZ   FAIRE— NOT   A   SCIENTIFIC   DOGMA.  93 

force,  wliicli  we  can  not  rid  ourselves  of.  "Whatever  may 
be  the  antithesis  between  governmental  interests,  djnastic 
interests,  and  free  private  interests,  here  at  least  there  is  a 
measurable  mergiiig  of  the  egoistic  principle  into  the  prin- 
ciple of  community,  which  is  the  government.  The  sense 
of  the  predominance  of  common  views  weakens  the  force 
of  motives  terminating  in  self.  When  men  are  relieved 
from  the  burden  of  procuring  the  necessaries  of  life,  the 
various  ambitions  which  play  so  large  a  part  in  life,  the 
consciousness  of  efficient  co-operation  with  one's  fellow- 
men  is  a  dominant  pleasure  and  a  powerful  motive.  It 
will,  on  reflection,  appear  evident  enough  that  neither 
political  economy,  nor  any  other  science  having  to  do  with 
social  facts,  ever  can  exist  if  self-interest  were  the  only 
spring  of  human  action.  From  self  through  the  family, 
the  nation,  to  humanity  in  general,  there  is  an  extension 
of  altmistic  feelings,  weakened  in  degree  only,  not  differ- 
ent in  kind.     This  is  our  human  nature. 

Mr.  Mill,  in  a  passage  in  his  "Autobiography,"  gives 
ns  this  as  his  ideal  of  the  social  life  which  we  are  likely  to 
attain  :  "  While  we  repudiate,  with  the  greatest  energy, 
that  tyranny  of  society  over  the  individual  which  most  so- 
cialistic systems  are  supposed  to  involve,  we  yet  look  for- 
ward to  a  time  when  society  will  no  longer  be  divided  into 
the  idle  and  the  industrious ;  when  the  rule  that  they  M^ho 
do  not  work  shall  not  eat  will  be  applied,  not  to  paupers 
only,  but  impartially  to  all ;  when  the  division  of  the  prod- 
uce of  labor,  instead  of  depending,  as  in  so  great  a  degree 
it  now  does,  on  the  accident  of  birth,  will  be  made  by  con- 
cert on  an  acknowledged  principle  of  justice ;  and  when  it 
will  no  longer  either  be,  or  be  thought  to  be,  impossible 
for  human  beings  to  exert  themselves  strenuously  in  pro- 
curing benefits  which  are  not  to  be  exclusively  their  own, 
but  to  he  shared  with  the  society  they  helong  toP 


94  PROTECTION    VS.  FREE  TRADE. 

Tlie  precise  and  abstract  rules  of  political  economy 
meagerly  embrace  tbe  ruling  laws  of  nature,  everlastingly 
and  invariably  guiding  the  macliinery  of  human  toils  and 
struggles.  We  have  not  only  sympathy  and  the  sense  of 
community,  as  illustrated  in  the  family  and  in  the  State, 
mitigating  the  selfish  pursuit.  We  have  further,  the  an- 
tagonistic forces  of  indolence  and  habit,  the  struggle  be- 
tween the  desire  of  immediate  enjoyment  and  the  desire  of 
accumulation.  All  these  motives  this  egoistic  political 
economy  adds  to  and  subtracts  from,  as  if  they  were  in  a 
state  of  mechanical  mixture,  and  were  capable  of  separation 
in  action.  Human  motives  can  not  thus  be  added  and 
subtracted.  By  their  co-operation  in  the  individual  they 
become  different  from  what  they  are  in  themselves.  They 
constitute  one  new  composite  entirety,  ^o  dynamometer 
can  measure  out  the  force  contributed  by  each  to  the  gen- 
eral resultant.  There  is  not  one  side  of  a  man  which  is 
employed  in  selfish  barter  and  another  in  miselfish  benevo- 
lence. Men  are  not  built  in  compartments,  in  one  of  which 
egoism  is  supreme,  and  in  another  sympathy,  in  another 
justice.  The  whole  composite  nature  of  the  man  acts. 
Oxygen  and  hydrogen  constitute  water,  but  water  is  a  new 
and  different  compound.  Its  behavior,  as  water,  in  no  way 
conforms  to  the  behavior  of  the  oxygen  and  hydrogen,  as 
such.  So  far  as  conduct  is  concerned,  it  in  no  way  aids  us 
to  know  that  water  is  composed  of  the  two  gases,  and  no 
amount  of  knowledge  or  speculation  as  to  the  conduct  of 
oxygen  and  the  conduct  of  hydrogen,  separately,  furnish 
the  slightest  clew  to  the  conduct  of  water. 

Prof.  Perry  says  that  political  economy  does  not  "  cover 
the  entire  relations  of  buyers  and  sellers,  but  only  the  rela- 
tions of  buyers  and  sellers  as  such  /  morality  and  religion 
have  additional  but  not  incompatible  words  to  utter  when 
this  science  hecomes  silent^     There  ai'e  no  "  buyers  and 


LAISSEZ  FAIRE— NOT  A   SCIENTIFIC   DOGMA.  95 

sellers  as  sxicliP  The  words  wliicli  morality  and  religioiT 
utter  to  them  are  not  additional,  they  are  synchronous. 
The  resaltants  of  our  social  life  are  the  product  of  all  the 
capabilities  of  the  composite  man,  buyer,  seller,  father, 
citizen,  lazy,  industrious,  hopeful,  honest,  poor,  unjust, 
prudent,  or  reckless.  It  is  an  orchestra  wliose  balanced 
melodies  are  not  the  consecutive  notes  of  instruments  alter- 
nately played  upon,  but  the  joint  contemporaneous  and  in- 
stantaneous concord  of  the  whole.  The  sensuous  effect  of 
the  orchestral  harmony  is  irresolvable  into  the  contribution 
of  each  performer.  It  is  a  chorus  in  which  there  are  no 
solos.  If  the  buyer  and  seller  "  as  such "  are  operating 
under  the  axioms  of  pure  selfishness,  there  can  be  no  guar- 
antee that  the  transaction  will  not  result  in  a  theft  and  not 
a  sale.  The  sole  pursuit  of  the  economic  gain  which  ego- 
ism provokes,  may  provoke  justice  to  reward  it  with  the 
penitentiary.  If  the  motives  inspiring  us,  wliicli  we  ordi- 
narily call  moral  motives,  were  dropped  out  of  the  lives  of 
any  of  us,  the  daily  record  of  conduct  would  be  a  blank. 
Any  such  purely  atomistic  conception  of  society  is  worthless 
for  this  or  any  other  science.  Moral  motives  not  only  do 
not  drop  out,  but  they  can  not  be  made  to  drop  out.  If  they 
could  droj)  out,  the  race  would  cease  to  be  human.  The 
economists  first  empty  their  economic  man  of  all  the  apti- 
tudes and  attributes  which  they  conceive,  for  tlie  sake  of 
simplicity,  are  not  involved  in  the  "  buyer  and  seller  as 
such,"  and,  having  ascertained  how  they  think  such  a  sup- 
posititious creation  would  comport  itself,  they  conclude  that 
the  actual  human  being  will  bring  his  acts  into  conformity 
with  their  theoretic  laws. 

Prof.  Caimes,  in  criticising  Bastiat's  economic  philoso- 
phy, it  seems  to  me,  removed  the  foundation  of  the  whole 
science  as  developed  by  Adam  Smith  and  his  successors : 
"  It  is  much  as  if  a  chemist  were  to  propound,  as  a  solution 


96  PROTECTION    VS.  FREE   TRADE. 

of  the  problem  of  the  com230sition  of  bodies,  that  matter  is 
compounded  of  elementary  atoms,  omitting  to  classify  tlie 
various  forms  of  matter  according  to  tlieir  elementary  con- 
stitution, or  to  say  in  what  proportion  in  each  class  the  ele- 
ments combine.  Such  a  generalization  is  no  generalization 
in  the  scientific  sense  of  the  term :  it  is  a  compounding  of 
a  crowd  of  unanalyzed  phenomena  under  an  ambiguous 
word."  Still  less  of  scientific  value  would  the  solution 
have,  if  the  forms  of  matter  were  incapable  of  classification, 
or  if  it  was  impossible  to  discover,  or  say,  in  what  propor- 
tion the  elements  in  hand  did  combine. 

The  synthesis  of  moral  and  mental  forces  in  the  actual 
human  being  is  insoluble,  and  all  fancied  analyses  must  be 
remanded  to  the  hmbo  of  speculation  in  which  the  human 
family  have  indulged,  with  little  profit  and  no  conclusions, 
since  the  days  of  Plato.  At  the  same  time,  while  they 
have  been  baflied  by  the  speculation,  they  have  gone  on 
and  made  great  communities  and  systems  in  which  politics, 
commerce,  war,  religion,  morals,  and  love  have  been  min- 
gled with  the  desire  of  wealth  in  ever-varying  proportions 
and  energy.  We  have  evidently  not  identified  the  central 
agent  in  the  "  desire  of  wealth."  ^ 

'  "  Another  consideration  occurs  in  this  connection.  It  is  impossible  to 
separate  tlie  individual  from  his  surroundings  in  state  and  society.  In  the 
strictest  sense  of  the  term  and  from  a  purely  scientific  standpoint,  we  do  not 
live  for  ourselves  alone  but  for  one  another  as  well  as  for  ourselves.  We 
are  inextricably  and  organically  bound  up  in  state  and  society.  What  we 
call  self-interest  is  as  a  rule  not  interest  for  one  individual.  It  is  a  desire 
for  the  welfare  perhaps  of  two,  three,  or  four  united  in  a  family,  perhaps  of 
a  circle  of  friends  or  relatives,  perhaps  of  a  town,  city,  or  state.  How  many 
men  toil  for  the  ego  alone  ?  Assuredly  very  few.  What  we  call  egoism  is 
usually  only  relative.  We  moan  the  circle  is  too  narrow.  Of  course  all 
this  does  not  deny  the  existence  of  such  a  thing  as  downright  egoism  or  self- 
ishness, any  more  than  it  denies  the  fact  of  the  existence  of  robbery,  false- 
hood, and  murder. 

"  AH  this  proves  that  it  is  not  individual  self-interest,  certainly  not  indi- 


LAISSEZ  FAIRE— NOT   A  SCIENTIFIC  DOGMA.  97 

In  tlie  second  place,  we  tlien  come  to  the  real  premise 
of  the  doctrine  of  laissez  faire,  that  "  every  man  in  pur- 
suing his  own  advantage  at  the  same  time  furthers  the 
good  of  all." 

Now,  this  is  not  laid  down  as  a  practical  rale  which  in 
the  greater  number  of  instances  it  will  be  safer  to  follow. 
It  is  set  up  as  a  scientific  principle  to  be  universally  ap- 
plied to  every  social  or  industrial  organization.  The  bind- 
ing implication  is  that,  taking  human  beings  as  they  are, 
in  the  actual  state  of  moral  and  intellectual  development 
they  have  reached  ;  taking  account  further  of  the  physical 
conditions  with  which  they  are  surrounded  in  the  world ; 
lastly,  accepting  the  institution  of  private  property  as  un- 
derstood and  maintained  in  most  modem  states,  the  prompt- 
ings of  self-interest  will  lead  individuals,  in  all  that  range 
of  their  conduct  which  has  to  do  with  their  well-being, 
spontaneously  to  follow  that  course  which  is  most  for  their 
own  good  and  for  the  good  of  all.  That  is,  "  first,  that 
the  interests  of  human  beings  are  fundamentally  the  same ; 
that  what  is  most  for  my  interest  is  also  most  for  the  inter- 
est of  other  people ;  and,  secondly,  that  indi\adiials  know 
their  interests  in  the  sense  in  which  they  are  coincident 
with  the  interests  of  others,  and  that,  in  the  absence  of 
coercion,  they  will,  in  this  sense,  follow  them." 

When  Colbert,  the  great  finance  minister  of  Louis  XIY, 
asked  the  merchant  Legendre  as  to  the  best  means  of  pro- 
tecting French  commerce,  the  answer  was,  "  Laissez  /aire, 
laissez  passerP  Colbert  reorganized  French  industry  by 
protective  measures,  by  making  nianufacturers  and  com- 

vidual  selfishness,  but  social  considerations,  which  are  the  first  and  foremost 
factor  in  economic  life  in  modern  times.  It  is  a  social  consideration  which 
induces  the  English  capitalist  to  prefer  '  eight  or  ten  per  cent  profit  with 
English  society  to  the  quadruple  returns  of  California  or  Australia.'  " — Prof. 
Ely. 

6 


98  PROTECTION    VS.  FREE  TRADE. 

merce  free,  for  the  first  time,  with  hi  the  limits  of  the 
French  Empire.  He  broke  down  the  cordon  of  custom- 
houses and  regulations  and  restrictions  which  hampered 
French  industry  within  the  lines  of  French  territory.  He 
first  gave  their  industry  national  form  and  national  ex- 
tent. His  achievements  have  justly  attracted  the  praise 
and  approval  of  historians  and  economists.  Quesnay,  the 
head  of  the  French  economists,  the  Physiocrates,  exalted 
the  words  of  Legendre  into  an  absolute  scientific  axiom. 
M.  Wolowski,  who  wrote  the  Preliminary  Essay  to  Pos- 
cher's  "  Pohtical  Economy,"  says  of  it : 

"  There  is  need  of  institutions  to  complete  the  exercise 
of  the  independence  acquii-ed  by  labor,  and  of  laws  to 
regulate  that  exercise.  The  laissez  faire  and  laissez 
jyasser  of  economists  is  in  no  way  like  the  absolute  for- 
mula, which  some  have  denounced  and  others  sought  to 
utilize,  as  relieving  authority  of  all  care  and  all  interven- 
tion. 

"  To  understand  this  maxim  aright  we  must  go  back  to 
the  oppi'essive  regime  of  ancient  society.  Quesnay's  for- 
mula was,  first  of  all,  a  protest  against  the  restraints  which 
hampered  the  free  development  of  labor.  But  it  did  not 
tend  to  abrogate  the  ofiice  of  legislator,  nor  to  deprive  so- 
ciety or  the  individual  of  the  support  of  the  j[)u'bliG  ^ower 
which  watches  over  the  fulfillment  of  our  destiny. 

"  It  may  have  seemed  convenient  to  find  in  the  gravity 
of  a  politico-economical  principle  an  excuse  for  the  sweets 
of  legislative  and  administrative  far  niente,  but  it  is  gen- 
erally conceded  that  the  role  of  aiithority  has  grown  rather 
than  diminished  under  the  regime  of  the  liberty  of  labor. 
The  task  is  in  our  day  a  hard  one,  both  for  individuals  and 
nations,  for  liberty  dispenses  its  favors  only  to  the  mascu- 
line virtues  of  a  laborious  and  an  enlightened  people. 

"  The  mission  of  authority  is  not  to  constrain  but  to 


LAISSEZ   FAIRE— NOT   A   SCIENTIFIC   DOGMA.  99 

counsel ;  not  to  command,  but  to  help  accojnpUsh  /  not  to 
absorl)  individual  activity,  but  to  develop  it." 

Prof.  Perry  says  :  "  Each  man's  right  of  freedom  is 
limited,  of  course,  by  every  other  man's  right  of  freedom, 
which  he  is  not  at  liberty  to  infringe ;  and  also,  in  certain 
respects,  by  what  is  called  tJie  general  good,  of  which  the 
judge  must  be  the  government  under  which  he  lives." 

How  far,  then,  is  the  laissez-faire  axiom  of  itself  likely 
to  result  in  the  good  of  the  whole,  or  to  affect  the  effort  of 
the  individual  for  his  own  good  I 

Individuals  may  be  relied  upon  to  pursue  their  own 
interests  according  to  their  knowledge,  experience,  and 
capacity;  how  far,  necessarily  and  as  a  fact  in  practice,  will 
their  interests  be  coincident  with  that  of  others  and  of 
the  whole  ? 

"  Human  interests  are  harmonious,"  exclaims  Bastiat ; 
"  let  them  alone,  and,  under  the  supreme  law  of  competi- 
tion, we  shall  have  the  equalization  of  individuals  on  a 
higher  plane  of  conciliation."  He  no  more  than  we  could 
shut  his  eyes  to  the  ugly  facts  of  industrial  ills  about  him  ; 
we  no  more  than  he  can  suggest  the  remedy.  But  it  is 
not  to  be  found  in  laissez  faire.  Speaking  of  those 
who  live  by  wages,  he  can  not  help  saying :  "  The  situa- 
tion of  men  of  this  class  is  essentially  precarious.  As 
they  receive  their  wages  from  day  to  day,  they  live  from 
hand  to  mouth.  In  the  discussion  which,  imder  a  free 
regime,  precedes  every  bargain,  they  can  not  wait :  they 
must  find  work  for  to-morrow  on  any  terms  under  pain  of 
death.  The  result  is  that  wages  tend  to  fall  to  the  lowest 
rate  which  is  compatible  with  bare  subsistence,  and  in  this 
state  of  things  the  occurrence  of  the  least  excess  of  com- 
petition among  the  laborers  is  a  veritable  calamity.  To 
deny  the  sufferings  and  wretchedness  of  that  class  of  men, 
who  bear  so  material  a  part  in  the  business  of  production, 


100  PROTECTION  VS.   FREE  TRADE. 

would  be  to  shut  our  eyes  to  the  llglit  of  day.  It  is,  in 
fact,  this  deplorable  condition  of  a  great  number  of  our 
brethren  which  forms  the  subject  of  what  has  been  justly 
called  the  social  j^'^ohlem  /  for,  although  other  classes  of 
society  are  visited  also  with  disquietudes,  sufiering,  sudden 
changes  of  fortune,  commercial  crises,  and  economic  con- 
vulsions, it  may  nevertheless  be  said  with  truth  that  liberty 
would  be  accepted  as  a  solution  of  the  problem,  did  mere 
liherty  not  apjpear  jyoiverless  to  cure  that  rankling  sore 
which  we  denominate  pauperism." 

Here,  then,  our  rule  breaks  down,  even  though  in  the 
presence  of  our  ignorance  and  powerlessness  we  know  no 
other  solution.  ''Letting  alone"  does  not  woi-k  harmoni- 
ous or  just  results,  and  political  economy  does  not  and  can 
not  accept  it  as  one  of  its  scientific  "  laws."  ^ 

AVhere  the  "law"  could  be  reversed  with  reasonable 
success,  it  has  been.  All  laws  for  common  schools,  all 
poor-laws,  all  factory  legislation  fixing  the  hours  of  labor 
and  the  ages  of  children  who  may  be  employed  as  laborers, 
all  legislation  directed  to  the  "  tnick  system,"  are  instances 
of  governmental  interference  with  the  freedom  of  contract. 
The  "  Irish  Land  Bill "  is  a  very  signal  instance  of  legisla- 
tive invasion  of  what,  in  all  Anglo-Saxon  history,  have 
been  considered  "  vested  rights."     We  shall  see,  later  on, 

^  "  If  all  that  Bastiat  and  his  confreres  write  only  held  in  real  life,  the 
solution  of  the  Social  Problem  would  indeed  be  an  easy  task.  Business  men 
know,  however,  that  the  share  of  the  produce  of  labor  and  capital  received 
by  la])or  diminishes  by  so  much  the  profits  of  capital,  and  that,  cfeicris  pari- 
bus, the  larger  the  proportion  of  profits  received  by  capital,  the  smaller  the 
proportion  received  by  labor.  That  there  is  an  entire  harmony  of  interests 
between  the  different  classes  of  society,  is  at  complete  variance  with  the 
teachings  of  modern  science,  and  '  is  at  best  a  dream  of  human  happiness  as 
it  presents  itself  to  a  millionaire.'  It  is  possible  to  reconcile  the  different 
classes  of  society  only  by  a  higher  moral  development.  The  element  of  self- 
sacrifice  must  yet  play  a  more  important  role  in  business  transactions,  or 
peace  and  good-will  can  never  reign  on  earth." — Prof.  Ely,  ut  supra. 


LAISSEZ  FAIEE— NOT  A  SCIENTIFIC  DOGMA.  IQl 

how  considerations  of  tlic  general  welfare  liave  justified 
this  course  of  administrative  action.  More  especially  in 
England,  parliamentary  interference  has  been  denounced 
as  contrary  to  the  sound  conclusions  of  political  economy. 

Adam  Smith  did  not  attempt  to  philosophize  over  the 
process  by  which  the  unrestrained  pursuit  of  his  own  good 
by  the  individual  led,  unconsciously  to  that  individual,  to 
the  general  welfare.  lie  generalized  from  a  few  very  in- 
adequate particular  instances.  He  boldly  went  into  the 
domains  of  theology  in  order  to  help  out  his  pohtical  econ- 
omy. "  Each  member  of  the  community  is  led  in  this,  as 
in  many  other  instances,  by  an  invisihle  hand  to  promote 
an  end  that  was  no  part  of  his  intention." 

In  contrast  to  this  view  of  Adam  Smith,  let  ns  see 
what  our  American  Prof.  Francis  A.  Walker  says :  "  Politi- 
cal economy  owes  nothing  to  natural  theology.  The  econ- 
omist is  under  no  obligation  to  any  assumptions  derived 
from  that  source.  He  has,  indeed,  no  more  right  to  start 
with  the  theory  of  an  order  of  nature  which  is  purely  benefi- 
cent, than  he  would  have  to  start  with  the  opposite  theory 
of  an  order  of  nature  wholly  maleficent.  As  an  economist, 
he  has  no  mission  to  '  vindicate  the  ways  of  God  to  man.' 
He  is  to  investigate  the  laws  of  wealth  ;  that  duty  he  will 
best  discharge  by  reasoning,  as  justly  as  his  mental  powers 
enable  him  to  do,  from  economic  premises  which  have  been 
established  by  adequate  induction,  and  from  such  only." 

But  the  fact  seems  to  be  that  there  is  no  such  coinci- 
dence between  the  interest  of  the  individual  and  the  so- 
ciety. 

Prof.  Caimes  has  not  hesitated  to  say  that  he  holds  it, 
as  usually  understood,  to  be  a  pretentious  sophistry,  desti- 
tute of  foundation  in  nature  and  fact,  and  rapidly  becoming 
an  obstiiiction  and  nuisance  in  public  aifairs : 

"  Kow  I  beg  you  to  mark  the  strange  assumptions  that 


102  PROTECTION  VS.   FREE  TRADE. 

underlie  tliis  reasoning.  Human  interests  are  naturally 
harmonious,  therefore  we  have  only  to  leave  j)eople  free, 
and  social  harmony  must  result :  as  if  it  was  an  obvious 
thing  that  people  knew  their  interests  in  the  sense  in  which 
they  coincide  with  the  interests  of  others,  and  that,  know- 
ing them,  they  must  follow  them  ;  as  if  there  were  no  such 
things  in  the  world  as  passion,  prejudice,  custom,  esprit  de 
corps,  class  interests,  to  draw  people  aside  from  the  pursuit 
of  their  interests  in  the  largest  and  highest  sense.  Here 
is  a  fatal  flaw  on  the  very  threshold  of  Bastiat's  argument, 
and  it  is  a  flaw  which  no  follower  of  Bastiat  has  repaired, 
which,  for  my  part,  I  believe  to  be  irreparable.  Nothing 
is  easier  to  show  than  that  people  follow  their  interests. 
But,  between  this  and  following  their  interest,  in  the  sense 
in  which  it  is  coincident  with  that  of  other  people,  a  chasm 
yawns.  This  chasm,  in  the  argument  of  the  laissez-faire 
school,  has  never  been  bridged.  The  advocates  of  the  doc- 
trine shut  their  eyes  and  leap  over  it." 

Prof.  Jevons  rejects  the  doctrine  :  "  It  is  fatal  to  at- 
tempt to  uphold,  in  regard  to  social  legislation,  any  theory 
of  eternal  fixed  principles  or  abstract  rights.  The  whole 
matter  becomes  a  complex  calculus  of  good  and  evil.  All 
is  a  question  of  probability  and  degree.  I  venture  to  main- 
tain that  we  shall  do  better  in  the  end  if  we  throw  off  the 
incubus  of  metaphysical  ideas  and  expressions.  We  must 
resolve  all  those  supposed  pi-inciples  and  rights  into  the 
facts  and  probabilities  which  they  are  found  to  involve 
when  we  inquire  into  their  real  meaning. 

"  The  right  of  a  man  to  dispose  freely  of  his  labor, 
means  the  recognition  by  the  legislature  that,  in  the  ma- 
jority of  cases,  a  man  is  the  best  judge  of  his  o"\^ti  interests 
in  disposing  of  his  labor.  In  a  number  of  cases  specified 
in  the  statute-book,  the  legislature  recognizes  an  opposite 
state  of  things. 


LAISSEZ  FAIRE— NOT  A  SCIENTIFIC  DOGMA.  103 

"  The  principle  of  the  freedom  of  trade  stands  on  the 
same  footing ;  it  is  a  probability  of  advantage  which,  how- 
ever, must  be  set  aside  in  case  of  a  greater  probability  of 
evil'' 

Prof.  Francis  A.  Walker  thinks  that  tlie  free-trade 
economists  have  taken  "an  nnjustili ably  lofty  attitude  on 
this  subject ;  practically  refusing  to  argue  the  question  at 
all,  as  one  of  national  expediency,  contenting  themselves 
with  occupying  the  high  ground  of  laissez  faire. 

"  Now,  the  doctrine  of  laissez  faire,  although  estab- 
lished by  the  English  economists  to  their  own  satisfaction, 
as  containing  a  principle  of  universal  application,  and  thus 
deemed  by  them  a  conclusive  answer  to  all  arguments 
specially  directed  to  justify  restrictions  upon  international 
trade,  has  never  been  accepted  in  the  fullness  of  signifi- 
cance given  to  it  by  them  throughout  any  wide  constitu- 
ency, not  even  by  any  large  proportion  of  the  educated 
classes — not  even  generally  by  publicists,  or  statesmen,  or 
men  of  affairs,"  ^ 

'  "  The  truth  is,  the  stera  necessities  of  political  life  compelled  statesmen 
to  violate  it  in  England  itself,  even  when  proclaiming  it  with  their  lips.  This 
was  first  done  apologetically,  and  each  interference  was  regarded  l)y  the 
'  school '  as  an  exception  to  the  rule ;  but  it  finally  began  to  look  as  if  it  were 
all  exception  and  no  rule.  Interference  was  found  necessary  in  every  time  of 
distress,  as  during  our  late  civil  war,  when  Government  borrowed  money  for 
public  works  to  give  employment  to  the  Lancashire  operatives,  at  the  time 
of  the  cotton  famine.  Every  reform  in  the  social  and  economic  institutions 
of  Great  Britain  has  been  accomplished  only  by  the  direct,  active  interference 
of  Government  in  economic  affairs.  When  Gladstone  began  his  work  of  con- 
ciliating Ireland  in  1869,  he  found  it  expedient  to  grant  loans  of  public  money 
to  occupiers  who  wished  to  improve  their  holdings,  and  to  proprietors  to  re- 
claim waste  lands  or  to  make  roads  and  erect  buildings,  enabling  them  there- 
by to  employ  labor.  In  1880  the  Government  of  Ireland  again  decided  to 
alleviate  the  sufferings  of  the  Irish  by  making  an  advance  of  £250,000  out 
of  the  surplus  of  the  Church  funds,  for  public  works  of  various  kinds,  in 
order  to  provide  employment  for  those  needing  it.  The  recent  Irish  acts 
interfering  between  tenant  and  landlord  in  the  matter  of  rent,  and  offering 


104  PROTECTION    VS.  FREE  TRADE. 

The  wliole  series  of  parliamentary  acts  regulating  fac- 
tory administration,  first  passed  more  tlian  half  a  century 
since,  have  been  based  on  principles  of  restriction.  By 
means  of  governmental  interference  hours  of  labor  have 
been  limited,  night-work  in  certain  cases  forbidden,  the 
employment  of  children  has  been  prohibited,  holidays  have 
been  prescribed,  and  sanitary  inspection  by  ofiicials  has 
been  provided  for.  In  his  "  Reign  of  Law,"  the  Duke  of 
Argyll  remarks  that  "  during  the  present  century  two 
great  discoveries  have  been  made  in  the  science  of  govern- 
ment :  the  one  is  the  immense  advantage  of  abohshing  re- 
strictions upon  "  (English)  "  trade ;  the  other  is,  the  absolute 
necessity  of  imposing  restrictions  upon  labor."  ^  Yet  this 
whole  system  of  legislation  was  resisted  by  the  economists 
as  opposed  to  their  eternal  fixed  principles,  or  abstract 
rights. 

"  They  asserted,"  says  Prof.  Walker,  "  the  entire  com- 
petence of  the  laboring  classes  to  protect  their  own  inter- 
ests ;  they  repeated  their  maxims,  laissez  faire^  laissez 
alter,  just  as  confidently  as  they  do  when  '  protective '  duties 

the  assistance  of  the  state  to  tenants  in  arrears,  violate  all  the  principles  of 
laissez-faire  economists,  and  are  nevertheless  applauded  by  the  wisest  and 
best  men  of  all  lands.  Laissez  f aire  was  tried  in  the  early  part  of  this  cent- 
ury in  English  factories,  with  results  ruinous  to  the  morality  of  women  and 
destructive  of  the  health  of  children.  Robert  Owen,  himself  a  large  and  suc- 
cessful manufacturer,  declared  that  he  had  seen  American  slavery,  and, 
though  he  considered  it  bad  and  unwise,  he  regarded  the  white  slavery  in  the 
manufactories  of  England  as  far  worse." — Prof.  Ely,  %d  supra. 

^  Prof.  Van  Buren  Denslow  adds :  "  The  Duke  of  Argyll  forgets  that  the 
discoveries  in  government  are  four,  not  two.  The  other  two  were  the  dis- 
coveries made  by  mothers — first,  that  their  daughters  ought  all  to  be  able  to 
swim ;  secondly,  that  they  should  on  no  account  go  near  the  water.  The 
latter  is  exactly  on  a  par  with  the  notion  that  it  can  be  an  economic  doctrine 
that  the  worker,  in  trading  in  his  work,  or  in  that  which  his  work  pro- 
duces, shall  not  be  free ;  but  that  the  trader,  in  trading  in  the  product  of 
another's  work,  shall  be  free." 


LAISSEZ   FAIRE— NOT   A   SCIENTIFIC   DOGMA.  105 

are  proposed ;  tliey  put  themselves  on  record  in  the  most 
formal  manner  against  all  measures  of  restriction  upon  fac- 
tory and  workshop  labor ;  they  cast  their  lot  witli  the 
opposition  to  this  class  of  legislation,  and  staked  the  repu- 
tation and  influence  of  political  economy  upon  their  being 
right  ill  this  matter.  But  it  did  not  turn  out  so.  Al- 
though in  the  lirst  instance,  that  of  the  act  of  1842,  Sir 
Robert  Peel,  the  elder,  had  been  so  solicitous  not  to  violate 
the  principle  of  the  self-sufficiency  of  labor  that  he  made 
the  bill  apply  only  to  apprentices,  the  wards  of  the  state, 
the  political  rightfulness  and  the  economical  expediency  of 
regulating  the  contract  for  labor  so  grew  upon  the  public 
mind  of  England  that  act  after  act  extended  the  supervision 
of  the  state  over  factory  and  workshop,  until  the  policy  of 
restriction  had  vindicated  itself  to  the  complete  satisfaction 
of  the  working  classes,  even  in  the  main  of  the  master  class 
themselves,  and  of  the  statesmen  of  the  kingdom  and  pub- 
licists almost  without  exception."  ^ 

Then  social,  political,  and  economic  reasons  united  in 
justifying  interference  with  the  freedom  of  contract ;  and 
we  have  the  dread  alternative  of  Prof.  Perry,  that  "  there 
can  be  no  science  of  exchanges  if  economical  reasons  can 
be  given  for  restricting  exchanges." 

*  "  In  our  own  country  it  is  curious  to  note  how  the  advocates  of  laisscz 
faire  abandon  position  after  position.  First,  tenements  are  exempted  from 
what  is  considered  the  general  law,  because  experience  has  shown  that 
'  nothing  short  of  compulsion  will  purify  our  tenement  districts.'  Then  it  is 
discovered  that  the  ordinary  laws  of  supply  and  demand  are  not  preserving 
our  forests ;  consequently,  that  individual  and  general  interests  do  not  har- 
monize. The  inadequate  action  of  competition  in  regulating  and  controlling 
great  corporations  gives  another  excuse  for  governmental  interference. 
*  Corners  '  in  necessaries  of  life  call  for  a  farther  abandonment  of  the  laissez- 
faire  dogma,  as  does  also  the  success  attendant  on  the  establishment  of  gov- 
ernment fisheries.  The  list  might  be  extended  almost  ad  libitum^  and  every 
day  adds  to  it.  Thus  has  laisscz  faire,  one  of  the  strongholds  of  past  politi- 
cal economy,  been  definitely  abandoned." — Prof.  Ely,  et  sicpra. 


106  PROTECTION    VS.   FREE   TRADE. 

It  is  agreed  that  tlie  "obvious  and  simple  system  of 
natural  liberty  "  is  an  oifshoot  of  the  ancient  fiction  of  a 
code  of  nature,  and  "a  natural  order  of  things"  is  a  form 
given  to  that  fiction  in  modern  times,  by  theology  on  one 
hand,  and  a  revolt  against  the  tyranny  of  the  folly  and  in- 
equality of  such  human  codes  as  the  world  had  known  on 
the  other. 

A  criticism  directed  against  the  oppressions,  political 
and  industrial,  of  mediaeval  times,  could  have  no  application 
to  the  United  States,  in  any  stage  of  its  career,  since  it  was 
an  organized  government.  Adam  Smith's  "Wealth  of 
ISTations  "  must  be  read  in  connection  with  his  "  Theory  of 
Moral  Sentiments,"  "  Abstraction  would  never  have  played 
so  great  a  part  in  Adam  Smith's  philosophy,  would  never 
have  resulted  in  such  sweeping  generalization  respecting 
the  beneficent  and  equitable  economy  resulting  from  the 
play  of  the  natural  inclinations  and  individual  interests  of 
men,  had  not  the  classical  conceptions  of  nature's  har- 
monious code  become  blended  with  the  theological  concep- 
tion of  that  great  benevolent  and  all-wise  Being,  who 
directs  all  movements  of  nature,  and  who  is  determined  to 
maintain  in  it  at  all  times  the  greatest  possible  quantity  of 
happiness.  It  is  incontrovertible  that  historical  investiga- 
tion convicts  the  nature  hypothesis  of  reproducing  a  mere 
fiction  of  ancient  philosophy,"     (Prof.  Leslie.) 

The  "principle  of  hberty"  as  a  practical  guide,  and 
laissez  faire  as  a  philosophical  maxim,  fall  to  the  ground. 

In  his  "  Statement  of  some  N^ew  Principles  on  the  Sub- 
ject of  Political  Economy,"  published  in  Boston  in  1834, 
John  Pae  undertook  to  demonstrate  that,  in  the  nature  of 
things  and  as  a  fact,  "individual  and  national  interests  are 
not  identical."  The  demonstration  is  complete.  Indeed, 
the  whole  book  is  a  capital  example  of  calm,  dispassionate 
exposition,  and  of  clear,  logical  argument.    Mr.  Mill,  whose 


LAISSEZ  FAIRE— NOT  A  SCIENTIFIC  DOGMA.  107 

own  writings  show,  through  and  through,  familiarity  with 
John  E,ae,  says,  "In  no  other  book  kno^vn  to  me  is  so 
much  light  thrown,  both  from  principles  and  history, 
on  the  causes  which  determine  the  accumulation  of  capi- 
tal." 

The  difierence  in  the  causes  which  give  rise  to  indi- 
vidual and  to  national  wealth  are  clearly  pointed  out.  His 
argument  is  conducted  upon  underljdng  principles.  I  quote 
one  of  his  illustrations  : 

"  Let  any  one,  in  any  country,  in  Great  Britain  for  in- 
stance, trace  backward  for  fifteen  or  twenty  years  the  mu- 
tations tliat  have  occurred  in  the  fortunes  of  the  persons 
with  whom  he  is  acquainted,  and  he  will  find  that  there 
are  few  whose  circumstances  are  not  very  much  changed 
from  what  they  were.  Good  conduct,  good  fortune,  and 
frugality  have  made  many  rich  who  were  then  poor ;  im- 
prudence, misfortune,  prodigality  have  made  many  poor 
who  were  then  rich.  But,  w^iile  that  man  has  been  adding 
house  to  house,  and  farm  to  farm,  and  this  has  been  giving 
up  one  portion  of  property  after  another,  till  he  finds  all 
he  once  possessed  in  the  hands  of  another,  the  whole  mass 
of  houses,  lands,  and  wealth  has  undergone  but  little  alter- 
ation :  the  national  capital  itself  remains,  comparatively, 
but  little  changed.  It  is  not  by  the  acquiring  wealth  pre- 
viously in  the  possession  of  others,  that  nations  enrich 
themselves.  But  a  very  small  part  of  the  capital  of  any 
community  can,  I  suspect,  be  accounted  for  by  tracing  its 
passage  from  any  other  community.  Instead  of  one  nation 
growing  rich  and  another  poor,  we  rather  see  many  neigh- 
boring nations  advancing  at  the  same  pace  toward  pros- 
perity and  affluence,  or  declining  equally  to  misery  and 
want.  As  individuals  seem  generally  to  grow  rich  by 
grasping  a  larger  and  larger  portion  of  the  wealth  already 
in  existence,  nations  do  so  by  the  jyroduction  of  wealth 


10  S  PROTECTION    VS.  FREE  TRADE. 

that  did  not  jyreviouslf/  exist.  The  two  processes  differ  in 
tliis,  that  one  is  an  acquisition,  the  other  a  creation.''^ 

He  was  no  behever  in  "  administrative  nihilism,"  "  The 
community  adds  to  its  wealth  by  creating  wealth,  and  if 
we  understand,  by  the  legislator,  ilie  power  acting  for  the 
community,  it  seems  not  absurd  or  unreasonable  that  he 
should  direct  part  of  the  energies  of  the  community  toward 
the  furtherance  of  this  power  of  invention."  ("  Invention 
is  the  only  power  on  earth  that  can  be  said  to  '  create,'  " 
he  says.)  "  In  the  following  cases  it  would  seem,  at  least, 
not  improbable  that  the  power  of  the  legislator  so  directed 
might  be  beneficial : 

"  I.  In  promoting  the  progress  of  science. 

"  II.  In  promoting  the  progress  of  art — 1.  By  encour- 
aging the  discovery  of  new  arts.  2.  By  encouraging  the 
discovery  of  improvements  in  the  arts  already  practiced  in 
the  country,  3.  By  encouraging  the  discovery  of  methods 
of  adapting  arts  already  practiced  in  other  countries  to  the 
particular  circumstances  of  the  territory  and  community 
for  which  he  legislates, 

"  But  a  case  of  the  circumstance  of  a  country  being  so 
peculiarly  favorable  to  the  practice  of  a  foreign  art  that,  in 
the  very  first  essays  it  makes  in  it,  it  can  successfully  com- 
pete with  another,  where  that  art  has  been  long  established, 
is  assuredly  rare ;  and,  if  any  such  case  occur,  w^e  may  be 
satisfied  that  the  manufacture  might,  with  much  advantage, 
have  hesn  j^reviously  introduced.  The  only  difference  be- 
tween us  "  (Adam  Smith  and  himself)  "  is,  that  the  doctrines 
he  advocates  teach  us  to  wait  till  the  miscalculations  of 
some  unfortunate  projector  confer  on  us  a  public  benefit. 
I  hold  that  it  would  be  more  just  and  judicious  that  the 
necessary  first  cost  of  the  scheme  should  be  borae  by  the 
whole  community  ;  more  just,  as  thus  the  burden  necessary 
to  be  borne  to  procure  a  common  benefit  will  be  divided 


LAISSEZ   FAIRE— NOT   A   SCIENTIFIC   DOGMA.  109 

among  all,  instead  of  being  sustained  by  one ;  more  judi- 
cious, as  the  society  will  not  have  to  wait  for  the  attainment 
of  a  desirable  object,  on  so  doubtful  a  chance  as  the  folly 
of  projectors." 

These  extracts  naturally  lead  up  to,  and  probably  sug- 
gested, the  concessions  made  by  Mr.  Mill  himself  in  favor 
of  protection^  a  concession  which  Prof.  Thorold  Rogers, 
Prof.  Price,  Prof.  Cairnes,  Prof.  Suumer,  all  agree  "is 
perpetually  quoted  and  is  perpetually  mischievous,  .  .  . 
ought  never  to  have  been  made,"  but  which  logically  in- 
volves all  that  has  ever  been  m-ged  by  protectionists  in  the 
United  States.  Mr.  Mill  had  admitted  the  reasonableness 
of  granting  patent  rights  and  copyrights,  and  then  guard- 
edly proceeds : 

"  The  only  case  in  which,  on  mere  principles  of  po- 
Htical  economy,  protective  duties  can  be  defensible,  is 
when  they  are  imposed  temporarily  (especially  in  a  young 
and  rising  nation),  in  hopes  of  naturalizing  a  foreign  in- 
dustry, in  itself  perfectly  suitable  to  the  circumstances  of 
the  country.  The  svperiority  of  one  country  over  another 
in  a  branch  of  production  often  arises  only  from  having 
begun  it  sooner.  There  may  be  no  inherent  advantage  on 
one  part,  or  disadvantage  on  the  other,  but  only  a  p)resent 
superiority  of  acquired  skill  and  experience.  A  country 
which  has  this  skill  and  experience  yet  to  acquire  may,  in 
other  respects,  be  better  adapted  to  the  production  than 
those  which  were  earlier  in  the  field ;  and,  besides,  it  is  a 
just  remark  that  nothing  has  a  greater  tendency  to  promote 
improvements  in  any  branch  of  production  than  its  trial 
under  a  new  set  of  conditions.  But  it  can  not  be  expected 
that  individuals  should,  at  their  own  risk,  or  rather  to  their 
certain  loss,  introduce  a  new  manufacture,  and  bear  the 
burden  of  carrying  it  on  until  the  producers  have  been 
educated  up  to  the  level  of  those  with  whom  the  processes 


110  PROTECTION  VS.   FREE  TRADE. 

are  traditional.  A  j)7vtective  duty,  continued  for  a  reason- 
able  time,,  will  sometimes  he  the  least  inconvenient  mode 
in  which  a  nation  can  tax  itself  for  the  support  of  such  an 
experiment.''''  ^ 

All  that  the  protectionists  in  the  United  States  ask  of 
the  doctrine  of  laissez  faire  is  "  let  alone,"  as  between  the 
fifty  millions  of  us  who  have  our  hands  on  all  the  levers  of 

1  This  passage  in  Mr.  Mill,  which  seems  on  its  face  to  embody  so  much 
plain  common  sense,  has  been  roughly  attacked.  Prof.  Bonamy  Price  places 
an  alarming  estimate  on  the  mischief  it  has  wrought.  He  says  ("  Practical 
Political  Economy,"  p.  315):  "No  name  of  high  celebrity  is  put  forward  so 
incessantly  as  the  shield  of  their  doctrine,  by  the  advocates  of  protection,  as 
that  of  Mr.  Mill,  and  so  great  is  the  support  which  it  gives  to  a  policy  so  pro- 
foundly injurious  to  ilie  luippiness  of  mankind  "  (isn't  this  a  rather  euphemistic 
exaggeration  for  the  only  thing  the  professor  can  mean,  the  prosperity  of  the 
present  generation  of  English  manufacturers?),  "that  it  may  almost  be  ques- 
tioned whether  Mr.  Mill  has  not  done  more  harm  to  the  welfare  of  the  human 
race  by  the  countenance  he  has  given,  though  limited,  to  protection,  than  he 
has  done  good  by  all  his  other  writings  on  political  economy." 

Prof.  Thorold  Rogers  re-enforces  Prof.  Price : 

"  Few  statements  made  by  any  writer  have,  I  am  persuaded,  been  more 
extensively  though  unintentionally  mischievous  than  this  admission  of  Mr. 
Mill.  The  passage  has  been  quoted  over  and  over  again  in  the  United  States 
and  in  the  British  colonies  as  a  justification  of  the  financial  system  which 
these  communities  have  adopted.  The  circumstances  in  which  they  are  situ- 
ated exactly  square  with  the  hypothesis  of  Mr.  Mill.  The  countries  are  young 
and  rising — industries,  as  yet  nascent,  are  thoroughly  suitable  to  the  natural 
capacity  of  the  rer/ion  and  of  the  people,  the  latter  being  of  the  same  stock 
with  the  mother-country,  whose  manufactures  they  prohibit  and  discourage. 
There  is  no  reason,  apparently,  except  that  of  priority  in  the  market,  why  the 
industry  of  the  old  country  should  not  be  transplanted  to  the  new.  Hence,  I 
repeat,  Mr.  Mill's  concession  is  perpetually  quoted,  and  is  perpetually  mis- 
chievous." 

"  Mr.  George  W.  Sraalley  (of  the  '  New  York  Tribune ')  asked  Mr.  Mill, 
during  his  later  years,  '  whether  he  still  adhered  to  this  statement  ? '  '  Cer- 
tainly,' was  his  answer.  '  I  have  never  affirmed  anything  to  the  contrary.  I 
do  not  presume  to  say  that  the  United  States  may  not  find  protection  expe- 
dient in  their  present  state  of  development.  I  do  not  even  say  that,  if  I  was 
in  America,  I  should  not  be  a  protectionist.'  " — Pkof.  Thompson,  "  Political 
Economy  "  p.  250. 


LAISSEZ   FAIRE— XOT   A  SCIENTIFIC   DOGSLi.  m 

industry  possible  to  any  p2oplG — "  liands  off,"  as  to  the  rest 
of  the  industrial  world.  Government  can  arrange  these 
conditions  for  us,  and  conserve  in  the  completest  manner 
"  the  obvious  and  simple  system  of  natural  liberty  " — our 
own  natural  liberty — to  have  access  to  our  own  resources. 

Judge  Phillips  says,  wisely :  "  Legislators  can  not  stand 
neutral,  as  mere  lookers-on  at  a  drama,  in  the  catastrophe 
in  which  they  have  no  hand.  They  are  the  appointed  re- 
sponsible actors  and  agents,  and  the  result,  whether  success 
or  ruin,  is  of  their  achievement. 

"  The  false  pretense  of  free  trade  not  to  act,  is,  in  fact, 
positively  and  directly,  in  the  most  efficient  manner  possi- 
ble, taking  sides  ^vith  the  foreign  competitor.  The  pre- 
tense that  the  Government  is  to  be  neutral  in  this  contest 
is  as  preposterous  as  to  pretend  that  it  is  to  be  neutral  in 
the  case  of  hostilities  with  any  foreign  country." 

James  Madison  easily  formulated  out  of  the  facts  of  our 
history  this  conclusion  :  "  To  allow  trade  to  regulate  itself 
is  not,  however,  to  be  admitted  as  a  maxim  universally 
sound  ;  our  oion  experience  has  taught  us  that  it  is,  in  cer- 
tain cases,  the  same  thing  as  allowing  one  nation  to  regulate 
it  for  another." 

As  a  rule  of  individual  or  national  conduct  we  may, 
then,  dismiss  laissez  faire^  not  only  as  a  pretentious  sophis- 
try, but  as  a  very  pretentious  humbug. 


CHAPTER  YI. 

AN   ANALYSIS    OF    FOEEIGX    TKADE — THE    EEAL    QUESTION    AT 

ISSUE. 

We  have  now  come  into  sight  of  the  problem  of  politi- 
cal economj.  It  is,  namely,  to  investigate  the  nature,  the 
causes,  the  amount,  and  the  distribution  of  wealth  in  human 
society,  and  the  laws  of  coexistence  and  sequence  discover- 
able in  this  class  of  social  phenomena.  The  solution  offered 
by  current  orthodox  deductive  economists,  and  the  one  to 
which  we  have  been  giving  attention  somewhat  in  detail, 
may  be  briefly  but  accurately  summed  up  as  follows  : 

"  The  nature  of  wealth  is  explained  by  defining  it  as 
comprising  all  things  which  are  objects  of  human  desires 
limited  in  supply  and  valuable  in  exchange.  Of  the  causes 
governing  its  amount  and  distribution  the  chief  ex]DOsition 
is  that  the  desire  of  wealth  naturally  leads,  where  security 
and  liberty  exists,  to  labor — accumulation  of  capital,  appro- 
priation of  land  and  its  resulting  rent,  division  of  labor,  or 
separation  of  emplojnnents — commerce,  and  tlie  use  of 
money.  Whence  a  continual  increase  in  the  total  stock  of 
wealth  and  its  distribution  in  wages,  profit,  and  rent,  fol- 
lowed by  the  prices  of  products  in  proportion  to  the  labor, 
sacrifice,  amount  of  capital,  and  quantity  and  quality  of 
land  contributed  by  each  individual  to  production.  Inas- 
much as  human  fecundity  tends  to  augment  population  in 
a  geometrical  ratio,  while  the  productiveness  of  the  soil  is 
limited,  the  proportion  of  rent  to  wages  and  profit  tends  to 


AN  ANALYSIS   OF  FOREIGN   TRADE.  II3 

increase  in  tlie  progress  of  society."  This  is  the  entire 
framework  upon  wliicli  different  authors  pnt  the  iiesh  and 
muscles  to  suit  tliemselves. 

The  question  we  are  about  to  investigate  is  not  one  of 
taxation.  We  may  as  well  get  this  clearly  fixed  in  our 
minds.  "  Taxation  is  no  part  of  the  science,  and  there  can 
be  no  true  science  of  taxation.  Nature  has  given  no  whis- 
per that  we  can  hear  about  any  taxes,"  says  Prof.  Perry ; 
and  Prof.  Sumner  holds  that  "  there  are  no  scientific  laws 
of  taxation,  because  there  are  no  natural  laws  of  taxation. 
Nature  has  not  provided  for  taxation  as  she  has  for  produc- 
tion, exchange,  distribution,  and  consumption.  Taxation 
is  part  of  the  co-operation  of  society  for  its  own  defense 
against  the  evil  and  destnictive  forces  within  itself."  ^ 

The  question  involves,  first  and  last,  the  economic  effects 
of  restriction.  Restriction  is  an  effort  of  a  nation  to  pro- 
vide against  destructive  forces  from  without.  It  assumes 
the  existence  within  that  nation  of  productive  forces  which 
are  natural  and  proper  to  its  people,  and  it  undertakes  to 
use  them.  In  our  own  case,  it  undertakes  to  make  it  an 
inducement  to  the  people  of  other  lands  to  come  here  and 
enter  into  the  joint  possession  of  them,  and  to  set  no  domes- 
tic limit  to  the  forms  of  industry  within  reach.  Our  ac- 
tivities are  to  be  measured  by  our  capacities  and  numbers, 
and  are  not  to  be  restricted  to  the  supply  of  the  demand 
of  other  nations,  based  on  exchange  values. 

It  may  be  that  this  proposal  will  run  foul  of  some 
economic  doctrines  which  would  provide  a  comparatively 

'  Even  though  it  were  a  question  of  raising  surplus  money  for  public  pur- 
poses— taxation — it  might  be  good  economy.  Prof.  Senior  gives  a  clew  to  the 
secret  of  meeting  enormous  indebtedness  and  consequent  taxation:  "A  coun- 
try which  has  been  forced  into  raising  a  large  public  revenue,  suffers  far 
more  from  the  indirect  than  from  the  direct  effect  of  taxation — suffers  more 
by  being  prevented  from  prodacinrj^  than  from  being  ohlirjcd  to  pay.''''  The 
progress  in  the  payment  of  our  own  war-debt  is  in  point. 


114:  PROTECTIOX    VS.  FREE  TRADE. 

sparse  population  on  a  rlcli  soil  T\'itli  the  means  of  a  com- 
fortable, lazy  existence  tlirongh  exchanges  made  in  products 
which  cost  us  little  labor,  little  effort  and  sacrifice.  A  re- 
stricted number  of  human  beings  might  live  here  with  en- 
tire scientific  precision,  and  in  close  and  strict  subordina- 
tion to  the  technical  rules  of  an  abstract  system,  but  they 
must  forego  their  mission,  not  alone  of  creating  new  values 
— "wealth" — but  also  of  nation-making  and  of  historical 
standing.  The  orthodox  scorn  and  despise  the  sentiment 
of  nationality  in  these  discussions ;  but  if  the  satisfaction  of 
desires  be  the  true  end  of  human  effort,  the  insatiable  aspi- 
rations of  the  men  of  America  for  a  true  citizenship  and  a 
national  individuality  will  be  found  no  less  potent  and  utc- 
pressible  impulses  than  the  desire  for  wealth.  Wealth  is 
only  one  of  the  objects  the  successful  pursuit  of  which  has 
created  the  fullness  and  perfectness  of  Hfe  here.  It  has 
not  been  an  object  of  distinct  pursuit,  it  came  along  as  one 
of  the  many  ends  in  which  our  efforts  culminated — work- 
ing out,  as  a  whole,  the  general  welfare. 

And,  then.  Profs.  Perry  and  Sumner  ^  distort  the  whole 
discussion  of  the  protective  system,  effectuated  by  resti'ic- 
tions  upon  foreign  exchanges,  as  though  it  were  a  question 
of  taxation.  This  is  done  deliberately  to  cover  the  confu- 
sion a.nd  fallacy  which  that  mode  of  treatment  enables 
them  to  import  into  the  debate.  One  mode  of  reaching 
jorotective  results  is  by  imposing  import  duties  upon  for- 
eign manufactures.  In  this  case,  it  is  not  the  revenue, 
the  proceeds  of  that  particular  form  of  taxation  which  we 
are  after,  but  the  restriction  of  the  market  ^^ro  tanto  to  a 

'  I  name  these  two  very  distinguished  professors  because  they  are  able, 
alert,  and  have  made  the  only  scientific  contribution  to  American  free  trade. 
They  are  controversialists,  and  have  not  always,  under  their  fervor  of  con- 
viction and  impatience  with  dissent,  preserved  the  amenities  of  debate.  If 
they  are  met  in  the  same  spirit,  it  is  not  intended  as  disrespect  to  them. 


AN  ANALYSIS  OF  FOREIGN  TRADE.  II5 

home-producer.  The  economical  effects  could  be  reached 
as  effectively  bj  prohibitory  legislation  as  by  tariffs  for  rev- 
enue which  result  incidentally  in  protection.  The  whole 
contention  between  the  protectionist  and  the  free-trader 
may  be  carried  on  without  the  slightest  recurrence  to  the 
word  "  taxation,"  either  in  fact  or  idea.  Ha\ing  made  the 
protectionist  say  that  taxation  has  some  creative  power, 
Prof.  Sumner  rudely  challenges  him  to  the  proof  thus: 
"  The  rest  is  all  phrases  intended  to  occupy  attention  while 
the  thimble-rigging  is  going  on.  If  this  is  not  so,  let  some 
protectionist  analyze  the  operation  of  his  system  and  show 
])y  reference  to  undisputed  economic  principles  where  and 
how  it  exerts  any  effect  on  production  to  increase  it."  If 
the  protective  tax,  as  the  professor  insists  on  calling  it, 
should  prove  the  means  of  removing  the  obstacle  to  the 
best  distribution  of  the  population  and  natural  employment 
of  their  efficiency,  the  epithet  "thimble-rigger"  might  be 
unpleasantly  apphcable  elsewhere. 

If  the  distinction  between  taxation  and  the  regulation 
of  commerce  has  never  been  laiown  to  these  gentlemen,  it 
is  time  they  took  a  glance  at  the  ante-Revolutionary  de- 
bates both  in  the  British  Parliament  and  Colonial  Assem- 
blies. ■  The  speeches  of  Lord  Chatham  and  Edmund  Burke 
in  defense  of  the  colonies  contain  long  arguments  based  on 
the  distinction.  Indeed,  the  Revolution  did  not  hav^e  its 
origin  in  any  denial  of  the  parliamentary  right  to  impose 
limitations  for  "the  regulation  of  commerce,"  but  it  arose 
distinctly  out  of  the  effort  to  tax  the  colonies  directly  for 
the  purpose  of  raising  revenue.  The  legal  power  of  Par- 
liament "  to  regulate  commerce  "  was  not  disputed  by  the 
colonists,  but  they  protested  against  its  economic  effects  on 
them.  The  power  to  levy  taxes  was  instantly  resented,  un- 
less accompanied  with  the  right  of  representation.  The 
legal  power  in  Congress  "  to  regulate  commerce  "  includes 


116  PROTECTIOX  VS.   FREE  TRADE. 

the  power  to  l<ij  jj^ofective  duties,  and,  if  economic  reasons 
justify  it,  j^^ohihitory  duties.  Any  device  is  authorized 
which  promotes  "  the  general  welfare."  The  Constitutional 
grant  is,  "  to  regulate  commerce." 

Prof.  Perry  breaks  out  into  very  intemperate  words  in 
this  connection.  He  confuses  means  with  ends :  "  AYe  have 
seen  abundantly  already  what  protection  in  the  false  sense 
is,  as  complicated  and  comprehensive  taxes,  and  it  is  a  piece 
of  pure  and  plausible  deceit  to  apply  a  word  so  diffused 
with  wholesome  association  to  a  thing  so  penetrated  with 
loathsome  selfishness.  Government,  which  is  nothing  hut 
a  committee  of  citizens  to  attend  hnpartially  to  certain 
great  needs  of  the  whole,  is  thereby  prostituted  to  the  end 
of  the  possible  enrichment  of  the  few  at  the  cost  of  the 
certain  impoverishment  of  the  most."  We  may  as  well 
carry  along  with  us  the  professor's  definition  of  govern- 
ment. 

It  is  one  of  the  unaccountable  things  that  a  layman  is 
expected  to  draw  calm  and  lucid  conclusions  from  the 
furious  and  lurid  rhetoric  with  which  the  professors  of 
political  economy  always  go  about  it  to  lay  down  their 
premises  in  this  department  of  their  science.  In  his  ad- 
dress before  the  Tariff  Commission,  Prof.  Sumner  starts 
off  in  this  wise : 

"  Who  is  the  beneficent  genie  now,  who  works  all  the 
magic  of  the  protectionist's  system  ?  It  is  a  tax.  If  taxes 
are  only  rightly  adjusted,  says  the  protectionist,  they  make 
wages  high  and  low,  and  prices  high  and  low,  all  at  the 
same  time.  When  one  hears  this  kind  of  nonsense,  one  is 
forced  to  believe  that  the  sum  of  superstition  in  the  world 
is  a  constant  quantity.  Superstition  is  a  defective  sense 
of  causation.  .  .  .  The  protectionist  legislator  lays  a  tax, 
and  goes  home  secure  in  the  faith  that  wages  will  be  high, 
prices  low,  and  prosperity  stable,  as  if  there  were  a  fixed, 


AN  ANALYSIS  OF  FOREIGN   TRADE.  II7 

direct,  and  insvitable  law  of  nature  connecting  taxes  with 
social  welfare,  and  nothing  else.  .  .  .  This  superstition  is 
more  wild  than  fetichism  or  astrology." 

It  is  a  perfectly  legitimate  demand,  which  the  parties  to 
this  discussion  have  a  right  to  make  on  each  other,  that 
there  should  be  some  common  understanding  of  the  terms 
involved,  some  adequate  analysis  of  the  facts  with  which 
they  deal,  and  some  adequate  conception  of  the  principles 
of  political  economy,  or  the  practical  maxims  of  business, 
and  of  the  proper  application  of  the  one  to  the  other. 

Mr.  David  A.  Wells,  more  temperate,  but  still  inac- 
curate, defines  the  protective  system  as  one  which  maintains 
"that  a  state  or  nation  can  most  surely  and  rapidly  attain 
a  high  degree  of  superior  prosperity  by  protecting  or  shield- 
ing its  domestic  industries  from  the  competitive  sale  or 
exchange  with  the  products  of  all  similar  foreign  industries ; 
the  same  to  be  effected  either  by  direct  legislative  joro- 
hibition  of  foreign  commerce,  or  by  the  imposition  of  such 
discriminating  taxes  (duties)  on  imports  as  shall,  through 
a  subsequent  enhancement  of  prices,  interfere  to  a  greater 
or  less  extent  with  their  introduction,  free  exchange,  and 
consumption.  An  explanation  of  either  of  the  terms  '  free 
trade '  or  '  protection '  involves,  therefore,  a  presentation 
of  the  arguments  based  on  theory  or  experience  which  may 
be  adduced  in  support  of  the  respective  economic  systems 
of  which  they  are  the  expression." 

But  our  aggressive  friend  Prof.  Perry  will  not  admit 
the  possibility  of  either  theory  or  experience  in  the  case  of 
protection :  "  This  explains  a  peculiar  and  long-noticed  fact, 
namely,  the  protectionist  talkers  and  writers  rarely  or  never 
use  radical  analysis.  They  rarely  or  never  begin  at  the 
beginning,  take  simple  cases  and  follow  them  on,  try  to 
show  why  and  how  high  taxes  on  certain  things  promote 
the  pubhc  prosperity,  and  thus  connect  cause  with  effect 


118  PROTECTIOX    VS.  FREE  TFaDE. 

and  premise  with  conclusion.  On  tlie  contrary,  they  talk 
endlessly  ahout  protection,  ascribe  to  it  marvelous  efficacy, 
often  refer  to  it  as  if  it  were  a  leading  factor  in  the  devel- 
opment of  industry,  without  ever  once  taking  it  to  pieces 
before  our  eyes  and  showing  us  that  it  is  adapted  in  its 
very  nature  to  bring  about  the  results  ascribed  to  it.  The 
truth  is,  an  honest  analysis  is  fatal  to  it.,  and  so  recourse  is 
had  to  smooth  words  and  deceptive  phrases  and  ornamental 
epithets,  non-suggestive  even  of  the  real  natm*e  of  the 
thing." 

We  shall  try  to  take  it  to  pieces  and  venture  on  the 
analysis  suggested. 

In  a  very  incisive  paper,  "  The  Argument  against  Pro- 
tective Taxes"  ("Princeton  Eeview,"  March,  1881),  Prof. 
Sumner  concedes  two  possible  positions  which  the  protec- 
tionist may  assume.  Whenever  Prof.  Sumner  undertakes 
to  state  his  adversary's  premises,  it  must  be  noticed  that  his 
attitude  is  not  a  judicial  one.  Very  grave  allowances  must 
be  made  both  for  over-statements  and  under-statements  of 
his  opponent's  position,  and  very  thorough  filtration  must 
be  made  of  the  prejudgments  and  unfair  and  untrue  per- 
version which  he  thrusts  to  the  fore  as  his  adversary's 
premises  and  conclusions.  Making  allowances  for  rhetor- 
ical sophistries,  we  may  come  to  a  kind  of  an  understand- 
ing of  the  doctrines  which  a  protectionist  may  be  thought 
capable  of  entertaining  from  these  paragraphs,  taken  from 
the  paper  referred  to.  The  italics  indicate  points  at  which 
some  adjustment  of  words  to  things  are  to  be  made.  "  Mis- 
chievous thing,"  "  isolation,"  "  antagonism  of  nations,"  are 
the  professor's  glosses  on  alleged  doctrines  which  nobody 
holds  : 

"  1.  He  may  boldly  declare  that  there  is  a  science  of 
wealth  based  on  restrictions  ;  that  he  can  discover  the  prin- 
ciples of  it  and  reduce  them  to  a  theory ;  that  trade  be- 


AN   ANALYSIS   OF  FOREIGN   TRADE.  119 

tween  countries  is  a  miscMevous  tiling,  at  least  if  it  runs 
on  parallels  of  latitude ;  that  isolation  and  antagonism  of 
nations  is  tLe  law  of  nature  upon  which  wealth  and  ci^/ili- 
zation  depend ;  that  there  is  therefore  no  universal  science 
of  loealth,  but  only  a  national  science  of  wealth,  and  that 
this  science  is,  in  its  final  analysis,  only  a  generalization 
from  certain  empirical  maxims  of  economic  pohcy. 

"  2.  The  other  ground  which  the  protectionist  may 
take  is  that  protection  does  not  increase  wealth,  but  is,  for 
some  reason  or  other,  expedient." 

Prof.  Perry  says,  frankly  and  once  for  all,  that  "  there 
can  be  no  science  of  exchanges  "  (i.  e.,  no  such  science  as 
political  economy)  "  if  any  economical  reasons  can  be  given 
for  restricting  exchanges."" 

l!^ow,  the  protectionist  and  the  free-trader  are  dealing 
with  the  same  economic  forces.  What  these  are  we  under- 
took to  summarize  at  the  opening  of  this  chapter.  If  they 
start  from  the  same  premises,  there  must  be  some  fallacy 
in  reasoning  or  mistake  in  fact  somewhere,  for  their  con- 
clusions are  radically  at  opposites.  The  free-trader  thinks 
protection  is  a  fatal  economic  and  political  blunder.  What- 
ever estimate  we  may  make  of  our  progress  in  accumulat- 
ing wealth  in  the  United  States,  we  are,  he  thinks,  infi- 
nitely worse  off  than  we  should  have  been  under  free  trade. 
It  is  quite  difficult  to  imagine  what  the  idea  of  a  free-trader 
is  as  to  the  goal  we  might  have  reached.  And  it  may  be  a 
question  of  the  ideals  from  which  we  start  and  of  the  ends 
to  be  attained.  The  end  he  contemplates,  perhai)s,  is  not  to 
be  viewed  from  the  national  stand-point,  but  from  a  cosmo- 
politan. But  surely,  if  the  protectionist  and  free-trader 
start  together,  and  do  not  an-ive  together,  the  cross-roads 
where  they  separated  ought  to  be  discoverable.  Let  us 
start,  then,  with  the  two  distinguished  American  profess- 
ors whom  we  have  had  occasion  to  quote  so  often.     Prof. 


120  PROTECTION  P''^.  FREE  TRADE. 

Sumner,  in  Lis  "  Princeton  Eeview  "  essay,  affects  to  state 
the  issue,  "  free  from  all  sentimental  and  pedantic  rubbisli." 
As  is  his  custom,  he  asks  his  pupil  to  look  at  his  landscape 
through  glasses  which  he  has  colored  in  advance,  and  he 
always  faces  him  in  his  own  direction  before  he  starts  him. 
At  least,  he  is  a  master  of  the  art  of  so  putting  a  problem 
that  his  solution  is  disclosed  in  the  very  form  of  its  state- 
ment. Here  are  his  four  questions,  and  we  shall  try  to 
answer  them,  although  each  question  is  already  enceinte 
with  the  answer  he  has  carefully  prearranged.  They  logic- 
ally contain  the  whole  argument  against  Defensive  Duties. 
The  italics  are  not  his  : 

"  The  economic  question  about  the  tariff  is,  Does  it  en- 
able the  population  of  the  country  to  command  greater 
material  good  for  a  given  effort  ? 

"  The  political  question  about  protection  is.  Does  the 
statute  enacted  by  the  legislature  alter  the  distribution  of 
property  so  that  one  man  enjoys  another  marus  earnings? 
Has  the  state  a  law  in  operation  which  enables  one  citizen 
to  collect  taxes  of  another  ? 

"  The  scientific  question  about  protection  is,  Does  it 
lessen  the  ratio  of  effort  and  sacrifice  to  comfort  and  enjoy- 
ment f 

"  The  popular  question  about  protection  is.  Does  it 
prevent  me  from  supporting  myself  and  m,y  family  by 
my  labor  as  well  as  I  could  do  it  if  there  were  no  protect- 
ive taxes  ?  " 

These  questions  raise  legitimate  issues,  wliich  will  be 
discussed,  infra,  Chapters  IX  and  X. 

These  inquiries  are  made  by  a  scholar  thoroughly 
trained  in  a  science,  and  one  who,  year  after  year,  has 
guided  bright  and  inquisitive  minds  over  the  whole  field, 
and  who,  it  may  be  assumed,  see  and  understand  all  the 
contents  of  that  field.     Such  a  one  must  be  assumed  to  be 


AN  ANALYSIS  OF  FOREIGN  TRADE.  121 

able  to  apply  tlie  abstract  and  general  propositions  which 
belong  in  liis  science  to  the  concrete  facts  of  a  specitie  prob- 
lem. The  conclusion  he  reaches  ought  to  be  tme  in  some 
sense ;  if  not  to  the  actual  facts  of  the  case  in  hand,  it  pos- 
sibly might  have  been  true  m  some  supposititious  case — it 
might  be  made  to  correspond  with  certain  ideal  presupposi- 
tions. Of  course,  there  would  have  been  some  sort  of  definite 
industrial  organization  here  under  free  trade.  It  becomes 
the  professor  to  let  us  know,  in  detail,  what  it  would  have 
been.  It  is  certain  that  the  commercial  and  industrial 
ruins  which  the  United  States  now  present  to  a  sympathiz- 
ing world  are  not  nearly  so  wide-spread  as  the  theory  of 
Prof.  Sumner  says  they  ought  to  be.  The  dilapidation  is 
not  total,  and  he  is  compelled  to  admit  that  we  have  "  ac- 
cumulated capital  faster  in  the  United  States  than  in  any 
country  in  the  world."  The  economic  history  of  the  coun- 
try under  the  highly  protective  tariff  of  18G1  has  been  a 
standing  wonder  to  the  free-traders  of  England  and 
America.  It  yields  readily  to  adequate  analysis.  Its  phe- 
nomena are  explicable  under  very  obvious  principles.  Pro- 
tection worked  the  results  intended,  and  the  why,  lies  not 
very  deep. 

Mr.  Mill  says :  "  If  a  political  economist,  for  instance, 
finds  himself  puzzled  by  any  recent  or  commercial  phe- 
nomenon ;  if  there  is  any  mystery  to  him  in  the  late  or 
present  state  of  the  productive  industry  of  the  country 
which  his  knowledge  of  principles  does  not  enable  him  to 
unriddle,  he  may  be  sure  that  something  is  wanting  to  ren- 
der his  system  a  safe  guide  in  existing  circumstances. 
Either  some  of  the  facts  which  influence  the  situation  of 
the  country  and  the  course  of  events  are  not  known  to 
him,  or,  knowing  them,  he  knows  not  what  ought  to  be 
their  effects.  In  the  latter  case,  his  system  is  imperfect, 
even  as  an  abstract  system.     It  does  not  enable  hun  to 


122  PROTECTION    VS.  FREE  TRADK 

trace  correctly  all  the  consequences  even  of  assumed  prem- 
ises. .  .  .  Against  false  premises  and  unsound  reasoning, 
a  good  mental  discipline  may  secure  us,  but  against  the 
danger  of  overloohing  something^  neither  strength  of  un- 
derstanding nor  intellectual  cultivation  can  be  more  than  a 
very  imperfect  protection." 

In  the  nature  of  the  case  Prof.  Sumner  must  see  very 
definitely  the  course  of  economic  development  which  would 
have  taken  place  under  free  trade.  Any  of  us — all  of  us 
— can  figure  it  out  with  reasonable  completeness.  It  con- 
templates the  arrival  on  the  shores  of  America  of  a  limited 
number  of  men  acting  solely  under  economic  impulses. 
Tied  by  economic  considerations  to  European  commercial 
centers,  extending  by  concentric  hues  of  growth  exactly 
in  accordance  with  the  stimulus  furnished  at  those  centers, 
it  contemplates  the  arrival  on  these  shores  of  no  more  men 
and  women  than  may  supply  the  demand  for  the  raw  ma- 
terials which  their  old  home  market  would  take  up.  That 
is  what  the  Enghsh  statesmanship  which  founded  these 
colonies  avowedly  proclaimed  and  intended.  Indeed,  these 
emigrants  would,  it  must  be  supposed,  always  consider  that 
old  center  of  trade  as  their  ultimate  political  center,  nor 
would  they  deem  themselves,  in  thus  surrendering  to 
merely  commercial  considerations,  as  the  nucleus  of  a  new 
center  of  activity — of  a  nation.  The  theory  overlooks  the 
arrival  on  these  shores  of  the  multitude  fleeing  from  the 
workshops  of  Europe  and  the  religious  and  political  op- 
pressions which  had  compelled  them  to  expatiiate  them- 
selves, and  the  vast  occupation  of  the  new  opportunities 
here  afforded,  and  which  would  produce,  when  referred  to 
old  industrial  centers,  an  unsymmetrical  industrial  growth. 
"With  the  full  play  of  both  sets  of  agencies,  political  and 
industrial,  in  operation,  we  are  in  the  presence  of  an  en- 
tirely new  problem.     The  evolution  of  industries  and  of 


AN   ANALYSIS   OF   FOREIGN   TRADE.  123 

population,  if  made  liere  in  strict  correlation  to  European 
development,  would  have  presented  a  case  for  the  applica- 
tion of,  or  rather  would  have  illustrated,  some  of  the  well- 
known  principles  of  the  science  of  political  economy.  It 
assumes  that  we  are  built  upon  the  precise  kind  of  previ- 
sion with  which  the  founders  of  great  industries  endeavor 
to  adjust  supply  to  demand.  The  communitj  growing  up 
under  these  limitations  would  have  been  demonstrably  in- 
ferior in  acquisition,  in  energy,  in  civilization,  and  in 
wealth. 

Things  have  not,  however,  turned  out  in  the  United 
States  as  English  statesmen  and  the  free-traders  predicted. 
We  are  indubitably  prosperous — which  they,  of  course, 
deny.  They  have  failed  in  correct  predictions  of  economic 
events,  because  the  realization  of  the  result  has  been  con- 
tingent on  the  action  of  contemporaneous  agencies  not  in- 
cluded in  their  economic  premises.  Their  prevision  is  an 
attempt  to  forecast,  not  events,  but  tendencies,  and  these 
tendencies  have  been  counteracted  by  others,  of  which  the 
free-trader  is  deteiinined  to  take  no  account.  When  re- 
proached that  they  can  not  even  explain  the  present,  they 
rej)ly,  "  Oh,  now,  you  are  outside  your  science !  " 

Our  early  history  negatived  their  presuppositions.  Prof. 
Sumner  has  said,  with  great  emphasis  and  with  entire  ac- 
curacy, that  "  what  we  are  is  the  result  of  our  inherited 
traits  and  traditions  and  of  our  ])hy8ical  surrounding s^ 
Herein  he  fairly  jumps  the  inclosure  within  which  the  defi- 
nitions of  the  science  confine  him,  and  yet  he  betrays  his 
contempt  at  the  effort  to  mix  up  economic  and  "  sociologi- 
cal "  considerations.  Unfortunately  for  him,  the  Creator 
of  the  human  family  so  mixed  the  ingredients  in  human 
nature. 

The  economic  phenomena  of  America  are  incapable  of 
being  interpreted  upon  any  principle  of  exchange.     It  was 


124  PROTECTION  VS.   FREE  TRADE. 

a  case  in  wliicli  the  productive  forces  of  men  and  material 
conditions — "  inherited  traits  and  traditions  cmd  physi- 
cal surroundings  " — being  such  as  they  were,  must,  when 
brought  into  mutual  action  and  reaction,  eventuate  as  they 
did,  and  in  wliich  economic,  moral,  and  poUtical  motives 
conspired  to  force  us  to  the  Hue  of  development  which  we 
took.  In  our  human  nature  there  were  other  desires  just 
as  natm'al  as  "  trading."  It  can  be  shown  that  sound  eco- 
nomic considerations  alone  not  only  justified  but  compelled 
our  policy,  and  vindicate  our  career.  Before  proceeding 
to  answer  the  four  questions  asked  by  Prof.  Sumner,  let  us 
see  what  we  mean  by  "  trade,"  "  commerce,"  "  exchanges," 
foreign  or  domestic,  free  or  restricted. 

We  shall  find  no  more  "  exasperating,  almost  belliger- 
ent "  controversialist  than  Prof.  Perry.  Taking  up  his 
"  Political  Economy  "  at  the  chapter  on  "  Foreign  Trade," 
let  us  go  through  a  simple  supposed  case  with  him — the 
trade  between  England  and  France  in  cotton  and  silks. 

"  The  first  question  is.  When  wiU  it  be  mutually  profit- 
able for  England  to  send  cottons  to  France  to  buy  silks 
with,  and  France  to  send  silks  to  England  to  buy  cottons 
with  ?  The  answer  is  easy  :  The  trade  will  be  mutually 
profitable  when  efforts  bestowed  in  France  ujDon  silks  wiU 
procure,  through  exchange  with  England,  more  of  cottons 
than  the  same  amount  of  efforts  bestowed  in  France  upon 
cottons  will  produce  of  cottons  directly ;  and  then,  when 
efforts  bestowed  upon  cottons  in  England  will  procure  more 
of  silks,  through  exchange  with  France,  than  the  same 
amount  of  efforts  bestowed  in  England  upon  silks  will 
produce  of  silks  directly.  So  long  as  there  is  a  difference 
of  relative  efficiency  in  the  production  of  the  two  commodi- 
ties in  the  two  countries,  so  long,  setting  cost  of  carriage 
aside,  may  there  be  a  profitable  exchange  of  the  two.  To 
make  such  an  exchange  profitable  to  both  parties,  it  is  not 


^VX   ANALYSIS   OF   FOREIGX   TRADE.  125 

at  all  needful  that  the  cottons  exchanged  for  the  silks  shall 
have  cost  the  Enghsh  as  many  days'  labor  as  the  silks  have 
cost  the  French ;  or  that  tlie  silks  shall  cost  the  French  as 
mnch  as  the  cottons  cost  the  English.  It  is  not  a  question 
of  the  absolute  cost  of  either  commodity  to  the  parties  pro- 
ducing it "  (it  does  not  appear  whether  the  Professor  means 
cost — measured  by  "  labor  and  abstinence,"  or  by  "  wages 
and  profits,"  a  distinction  of  great  importance,  because,  in 
one  case,  cost  may  be  equalized  by  competition,  in.  the 
other,  not) ;  "  but  a  question  of  the  relative  cost  of  that 
produced  in  either  country,  compared  with  what  would 
be  the  cost  of  the  other  commodity  were  it  to  be  pro- 
duced in  that  country.  A  demand  in  each  country  for 
the  product  of  the  other  is,  of  course^  jpresupposed  in  the 
illustration^ 

This  proposition,  stuck  in  parenthetically,  is  vital,  and 
must  be  borne  in  mind.  The  whole  trade  in  each  country 
is  founded  on  a  demand  in  the  other  for  the  surplus  of  the 
product  in  which  it  has  the  greater  relative  efficiency. 
With  no  foreign  market,  it  is  compelled  to  sell  a  surplus 
product  in  the  home  market  at  a  reduced  average  effi- 
ciency. It  will  then,  by  home  production,  get  all  its  sup- 
plies at  the  cheapest  rate  possible  to  a  country  so  situated. 
If  it  had,  what  it  has  not,  an  adequate  foreign  market, 
it  would  preserve  its  highest  efficiency  by  exchanging  in 
that  market.  An  overpopulation  in  a  country,  resulting 
in  ovei-production,  would  be  an  economic  blunder:  and 
overpopulation  in  the  United  States  is  really  the  point 
at  which  the  free  foreign  trader  ought  to  direct  his  eco- 
nomic criticisms.  Having  such  an  ovei-population,  it 
is  the  business  of  an  American  economist  to  furnish  the 
"  services  "  which  they  may  render  each  other,  or  witness 
their  exodus. 

Prof.  Perry  goes  on : 


126  PROTECTION  VS.   FREE  TRADE. 

"  In  effect,  the  Frenclimen  ask,  Can  we  get  more  and 
better  cottons  by  working  in  silks  and  then  trading  them 
off  for  English  cottons,  than  we  can  get  hy  the  same  efforts 
in  working  on  cottons  at  home  ?  The  Englishmen  ask. 
Can  we  get  more  and  better  silks  by  working  in  cottons 
and  then  trading  with  France  for  silks,  than  we  can  get  by 
trying  to  make  silks  at  home  ?  " 

Yes,  if  all  the  silks  wanted  in  one  country  just  pay  for 
all  the  cottons  wanted  in  the  other,  and  they  acted  solely 
on  present  economic  motives :  if  England  quits  making 
silks  and  France  quits  making  cottons. 

"  The  second  question  is,  IIow  does  the  diversity  of 
relative  advantage  practically  work  in  foreign  trade  ? 

"  In  the  majority  of  cases,  doubtless,  foreign  trade  takes 
place  in  articles,  in  the  production  of  one  of  which  each  of 
the  respective  countries  has  an  absolute  advantage  over  the 
other,  but  an  every  way  advantageous  trade  maybe  carried  on 
in  articles  in  the  production  of  both  of  which  one  nation  shall 
have  an  absolute  superiority  over  the  other,  provided  only 
that  this  superiority  be  relatively  diverse  in  the  two  articles." 

This  is  a  rare  case  in  international  trade.  The  case  of 
Barbadoes  and  the  United  States  is  in  point.  The  inhabit- 
ants of  Barbadoes,  favored  by  their  tropical  climate  and  fer- 
tile soil,  can  raise  provisions  cheaper  than  we  can  in  the 
United  States.  And  yet  Barbadoes  buys  nearly  all  of  her 
provisions  from  this  country.  Why  ?  Because,  though 
Barbadoes  has  the  advantage  over  us  in  the  ability  to  raise 
provisions  cheaply,  she  has  a  still  greater  advantage  over  iis 
in  her  power  to  produce  sugar  and  molasses.  These  she  ex- 
changes with  us  for  flour.  If  there  were  no  foreign  market 
for  her  sugar  and  molasses,  Barbadoes  would  be  compelled 
to  raise  her  own  flour,  or  go  without  it.  It  may  be  as  well 
to  bear  this  in  mind :  that  she  could  buy  no  more  flour 
than  her  sugar  and  molasses  would  pay  for. 


AN   ANALYSIS   OF   FOREIGN   TRADE.  127 

"  The  third  question  is,  What  are  tlie  extreme  limits  of 
the  value  of  cottons  and  silks  in  the  case  supposed,  and 
when  will  a  third  nation  be  able  to  undersell  either  in  the 
ports  of  the  other  ?  " 

The  answer  to  tliis  raises  no  question  germain  to  our 
discussion. 

"  The  fourth  question  is.  How  does  the  varying  play  of 
the  international  demand  affect  the  value  of  articles  in  for- 
eign trade  ? 

"The  answer  is,  If  the  demand  for  French  silks  in 
England  Jz^s^  cuiswers  to  the  demand  for  English  cottons 
in  France,  so  that  the  silks  offered  by  France  just  pay  for 
the  cottons  offered  by  England,  then,  cost  of  carriage  aside, 
the  gains  of  the  trade  will  be  equally  dixaded  between  the 
two  nations.  .  .  .  This  case  of  equalization,  though  pos- 
sible, is  rarely  hkely  to  occur  in  practice.  In  any  terms  of 
exchange  hrst  offered,  there  is  likely  to  be  a  stronger  de- 
mand in  one  country  for  the  product  of  that.  This  will 
lead  to  a  change  of  value  and  a  new  division  of  profits. 
The  product  for  which  the  demand  is  less  will  find  its  mar- 
ket sluggish,  and,  in  order  to  tempt  further  and  brisker  ex- 
changes, will  be  compelled  to  offer  more  favorable  condi- 
tions. He  who  enters  a  market  in  quest  of  what  is  more 
in  demand y  with  a  service  in  return  lohich  is  less  in  de- 
mand, will  have  to  lower  his  terms  or  not  tradeP  Prof. 
Bowen  states  the  same  principle  in  these  words :  "  Which- 
ever nation  is  under  the  strongest  temptation  or  necessity 
to  buy  from  others — whichever  needs  to  huy  more  value 
than  it  can  sell — that  nation  labors  under  a  disadvantage  in 
the  traffic,  and  must  offer  its  own  commodities  at  the  low- 
est possible  priced 

"It  follows  from  these  principles,"  continues  Prof. 
Perry,  "  that  what  a  nation  purchases  by  its  exports,  it  pur- 
chases by  its  most  efiicient  labor,  and  consequently  at  the 


128  PKOTECTIOX  VS.   FKEE  TKADE. 

cheapest  possible  rate  to  itself.  Only  tliose  things,  for  the 
procuring  of  which  a  nation  possesses  decided  advantages 
relatively  to  other  nations  and  relatively  to  its  own  advan- 
tages in  producing  directly  what  is  received  in  return,  are 
ever  exported,  and  hence  the  return  cargoes,  no  matter 
what  they  have  cost  their  original  producers,  are  purchased 
by  this  nation  as  cheaply  as  if  they  had  been  produced  by 
its  own  most  advantageous  labor.  This  is  a  whoUi/  i?'/i- 
pregjiahle  position,  and  the  advocates  of  restricting  foreign 
trade  are  challenged  to  try  their  hand  a  little  at  its  de- 
fenses.^'' 

This  impregnable  position  lacks  the  only  basis  of  fact 
in  America  upon  which  it  can  possibly  stand.  The  con- 
sumption of  goods  in  the  United  States — the  product  of 
the  competing  or  ]3rotected  industries — is  larger  than  we 
have  ever  been  enabled  to  buy  in  the  world's  market  with 
any  or  all  of  our  exportations  which  the  world's  market 
would  buy  of  us :  nor  has  the  world's  market  ever  con- 
tained a  surplus  of  the  products  of  such  industries  sufficient 
for  our  wants,  even  if  we  had  the  proper  purchase-money. 
Our  wants  have  been  such  that  to  have  supplied  them 
all  abroad,  we  should  have  been  compelled  to  buy  more 
value  than  we  can  sell. 

"  The  sixth  question  is.  Which  party  in  foreign  trade 
pays  the  costs  of  carriage,  or  does  each  pay  them  in  equal 
proportion  ? " 

This  question  is  confessedly  insoluble  by  any  econo- 
mist. Our  Professor's  answer  is :  "  That  will  depend  on 
the  equation  of  international  demand.  ^Nothing  in  the  na- 
ture of  things  hinders  that  each  party  shall,  in  effect,  pay 
the  freights  of  the  other,  or  one  even  pay  the  freights  of 
lothP 

"  These,  then,"  concludes  the  Professor,  "  are  the  essen- 
tial principles  of  foreign  trade,  .  .  .  and  in  the  light  of 


AN  ANALYSIS  OF  FOREIGN  TRADE.  129 

their  principles  it  is  very  clear  that  foreign  trade  is  just  as 
legitimate  as  domestic  trade ;  that  it  rests  on  the  same  ulti- 
mate principles  in  the  constitution  of  man  and  in  the  provi- 
dential arrangements  of  nature ;  .  .  .  that  to  prohibit  it  or 
restrict  it,  otherwise  than  in  the  interest  of  morals,  health, 
or  revenue  "  (why  not  add,  the  general  welfare  ?),  "  must 
find  a  justification,  if  at  all,  outside  the  pale  of  political 
economy.  That  to  say  to  any  body  of  men  who  wish  to  ren- 
der merely  commercial  services  to  foreigners,  to  receive 
back  similar  sei-vices  in  return,  that  such  services  shall  nei- 
ther be  rendered  nor  received,  is  not  only  to  destroy  a  cer- 
tain gain^  but  also  to  interfere  with  a  natural  and  inalien- 
ahle  rigiitr 

This  last  proposition,  if  true,  would  end  the  discussion. 
It  is  not,  however,  a  proposition  in  political  economy.  It 
is  a  theorem  which  must  be  established  in  the  science  of 
law  or  morals  or  sociology.  It  never  has  been  proved,  and 
we  may  pass  it  with  the  assumption  that  it  never  can  be. 
Prof.  Walker  cheerfully  concedes  that  "  the  claim  to  free- 
dom of  trade  as  a  '  natural  right '  is  not  one  of  which  the 
economist  can  properly  take  account." 

Of  such  attempts  to  treat  an  art  like  a  science,  "  to  found 
theories  of  politics  on  what  is  called  abstract  rights,"  Prof. 
Cairnes  says :  "  They  are  a  species  of  hybrid  philosophy.  .  .  . 
The  argument  is  involved  at  the  outset  in  a  jpetitio  jprin- 
cipii.  The  question,  "What  is  %  and  the  question,  What 
ought  to  be  ?  are  distinct  questions.  It  may  be  that  the  an- 
swers to  them  coincide:  that  that  wJnch  is  is  also  that 
which  ought  to  he ;  but  then  this  is  a  thing  to  be  proved, 
not  to  be  taken  for  granted." 

To  this  analysis  of  foreign  free  trade  ought  to  be  added 
an  argument  for  free  trade  which  the  Professor  emphasizes 
throughout  his  treatise  :  "  If  a  nation  will  not  buy  of  for- 
eigners, it  can  not  sell  to  them.     This  is  the  universal  and 


130  TROTECTION  VS.   FREE  TRADE. 

fundamental  objection  to  "  protection,"  so  called,  that,  if 
legal  barriers  keej)  out  a  dollar's  worth  of  foreign  goods 
which  ivant  to  come  in,  they  thereby  and  necessarily  keep 
ill  a  dollar's  worth  of  domestic  goods  which  loant  to  go 
outP 

■  There  are  plenty  of  goods  which  we  want,  but  for- 
eigners do  not  have  for  sale  all  we  want — they  have  some 
only.  There  are  plenty  of  domestic  goods  whicli  want  to 
go  out,  and  foreigners  do  not  want  them.  Protective 
tariifs  do  not  stop  the  trade.  Our  purchasing  power  is  not 
of  the  right  Idnd  to  take  effect  in  the  foreign  market.  Our 
surplus  is  in  the  wrong  kind  of  merchandise ;  their  surplus 
is  not  large  enough  for  our  needs.  We  want  the  foreign 
goods,  but  under  the  facts  of  our  case  we  must  go  without 
tliem,  or,  if  we  want  them  "  bad  enough,"  we  must  go  to 
the  labor  and  cost  of  making  them  under  American  con- 
ditions— which  is  not  feasible  or  possible  "  under  freedom." 
If  foreigners  would  stop  competing  with  us  in  raising  food 
and  cotton,  and  give  us  the  market,  we  could  do  better,  so 
far  as  mere  trade  is  concerned— but  they  don't  stop  and 
they  won't  sto]3.  If  foreigners  loill  not  buy  of  us,  we  can 
not  buy  of  tliem.  We  can  not  buy  of  them  for  two  rea- 
sons :  their  market  can  not  offer  as  much  as  we  would  buy ; 
it  will  not  take  as  much  as  we  would  sell.  Tliis  state  of 
things  drives  us  to  competition. 


CHAPTER  YII. 

THE  ALTEKNATIVES   OFFERED   US — WHAT   WE  BUY  AND  WHAT 

WE    SELL. 

The  decks  are  now  fairly  cleared  for  action.  Tlie  first 
step  is  to  determine  the  industry  in  which  we  have  an  ab- 
solute superiority  over  other  nations. 

There  is  a  general  agreement  among  free-traders  that 
"  they  are  all  '  land '  industries."  ^  The  whole  stress  of  the 
free-trade  argument  is  that  we  ought  to  pursue  these  in- 
dustries and  supply  our  wants  of  other  commodities  by  ex- 
changes of  them  effected  through  free  foreign  trade.  For 
all  the  purposes  of  the  argument,  the  products  of  these  in- 
dustries are,  up  to  this  date  in  onr  history,  cotton,  tobacco, 
food  (in  the  various  exportable  forms  of  wheat,  corn,  meats, 
cheese,  butter,  hops,  etc.),  and  the  precious  metals — to 
which,  latterly,  may  be  added,  petroleum. 

One  of  two  sets  of  unalterable  assumptions  must  be 
made  in  putting  this  scheme  of  "  international  division  of 
labor  "  into  practical  operation  in  the  nation  which  we  call 
the  United  States. 

I.  One  set  is  this : 
1.  That  we  shall  in  the  United  States  raise  so  much  food 

'  The  ground  idea  of  them  all  is  well  expressed  by  Prof.  Cliffe  Leslie : 
"  The  best  economy,  of  course,  would  have  been  for  American  capital  to  con- 
fine itself  to  the  fields  in  which  it  had  superior  productiveness,  awaiting  a  rise 
of  wages  and  in  the  cost  of  coal-mining  in  England  for  competition  in  others." 
("Fortnightly  Review,"  October,  1881.) 


132  PROTECTIOX  VS.   FREE  TRADE. 

and  raw  materials  as  the  foreign  markets  will  take, 
and  no  more. 

2.  That  om*  population  shall  increase  no  faster  than  the 

number  of  laborers  involved  in  that  production  shall 
require. 

3.  That  increase  of  capital  shall  keep  pace  with  that  order 

of  development. 

4.  That  the  total  annual  produce  of  the  industry  and  capi- 

tal of  this  country  shall  be  kept  down  to  these  dimen- 
sions. 

The  "industrial  entity,"  the  nation,  so  formed,  is  the 
one  upon  which  the  science  of  free-trade  economy  has  fixed 
its  ideal  expectations.  The  rate  of  growth  and  ultimate 
size  reached  under  the  conditions  thus  prescribed  are  those 
which  the  science  says  ought  to  have  been.  It  contem- 
plates us  as  coming  all  the  way  across  the  Atlantic  to  start 
a  food  and  raw-material  factory,  limited  and  adjusted  to 
foreign  conditions.  We  were  simply  to  be  a  truck-farm 
for  Europe.  Now,  whatever  oiicjld  to  have  heen,  and  what- 
ever migJit  have  leen,  the  wrong  kind  of  men  came  to  make 
that  a  possible  result.  The  early  settlers  here  did  not 
found  a  penal  colony.  It  was  morally  impossible  that  they 
could  have  accepted  this  sort  of  conditions.  Under  them 
the  case  was  settled  adversely  by  the  course  of  our  actual 
history,  and  the  whys  and  wherefores  ai'e  too  numerous  to 
discuss. 

II.  The  other  set  is  this : 

1.  That  there  is  a  market  abroad  for  the  whole  surplus  of 

these  productions  in  our  most  advantageous  indus- 
tries. 

2.  That  all  our  capital  and  labor  could  be  employed  in 

their  production. 

3.  That  under  these  circumstances  the  exchangeable  value 

of  our  exports  would  not  be  reduced. 


THE   ALTERNATIVES  OFFERED   US.  133 

4.  That  tlie  excliangeable  value  of  our  imports  would  not 

be  increased. 

5.  That  our  wants  are  such  that  we  arc  not  compelled  to 

buy  more  value  than  we  can  sell. 

Of  the  alternatives  offered,  we  undertook  to  accept  the 
second.  We  did  not  attempt  to  take  our  place  in  the 
world's  industry  according  to  the  exact  rules  of  political 
economy,  because,  in  the  iirst  place,  Ave  did  not  come  in 
pursuance  of  mere  commercial  instincts  ;  in  the  second 
place,  we  were  not  that  kind  of  men ;  and,  in  the  third 
place,  too  many  of  ns  came.  We  therefore  rejected  the 
Iirst  alternative. 

We  did  undertake  to  accept  the  second,  because,  while 
we  came  to  found  homes  and  institutions,  it  seemed  as 
though,  proceeding  in  accordance  with  these  conditions,  we 
might  reach  the  expansion  which  our  inherited  traits  would 
work  out  of  our  physical  sun'oundings.  We  then  saw  no 
reason  why  our  industrial  entity  should  correspond  with 
our  pohtical  entity.  Upon  making  the  experiment,  we 
soon  found  that  they  must  correspond.  Why  this  was  so, 
the  free-trader  will  find  out  if  he  will  read  the  history  of 
his  country,  or  will  consult  any  practical  American  farmer 
now.  And  if  he  wishes  to  fortify  his  judgment  by  au- 
thority, let  him  buy  a  copy  of  Adam  Smith's  "  Wealth  of 
Nations  "  at  the  nearest  second-hand  bookstore. 

I  have  said  we  undertook  to  organize  our  national  in- 
dustries on  these  assumptions : 

1.  That  there  is  a  market  abroad  for  the  whole  sur- 
plus of  the  productions  in  our  most  advantageous  indus- 
tries. 

2.  That  all  our  capital  and  labor  could  be  employed  in 
their  production. 

3.  That,  under  these  circumstances,  the  exchangeable 
value  of  om^  exports  would  not  be  reduced. 


134  PROTECTION    VS.   FREE  TRADE. 

4,  That  tlie  exchangeable  value  of  our  imports  would 
not  be  increased. 

5.  That  our  wants  are  such  that  we  are  not  compelled 
to  buy  more  value  than  we  can  sell. 

We  failed  in  this  attempt,  because  eve?y  one  of  these 
assumptions  turned  out  to  be  wrong,  as  we  now  proceed 
to  show. 

This  is  a  proper  place  to  lay  down  two  or  three  gen- 
eral principles  in  the  science  which  no  one  is  interested  to 
dispute. 

Prices  are  in  the  main  determined  by  supply  and  de- 
mand. But  the  market  for  the  special  products  of  our 
food-industries  is  hmited  by  the  number  and  capacity  of 
the  stomachs  deijending  on  us  for  food.  It  is  a  well-under- 
stood fact  that,  in  civilized  nations,  more  value  is  consumed 
in  manufactured  goods  than  in  food.  In  the  United  States 
the  tea,  coffee,  sugar,  and  the  like  tropical  fruits  which  we 
consume  must  be  brought  from  abroad,  and  they  have  hith- 
erto been  paid  for  in  exports  of  raw  material. 

It  is  agreed  that  a  nation  pays  for  its  imports  with  its 
exports,  and  that  in  the  long  run  the  whole  imports  will 
be  equal  to  the  whole  exports  ;  unless  it  is  when  a  nation 
is  borrowing,  as  the  United  States  did  on  a  great  scale 
during  the  war,  and  in  the  growth  of  its  railroad  enter- 
prises ;  or  unless  a  nation  is  in  the  receipt  of  income  for 
foreign  loans  and  investments,  as  is  the  case  with  Eng- 
land at  present.  Her  imports  exceed  her  exports  by  a 
hundred  million  pounds  annually — an  apparent  unfavorable 
balance,  but  it  is  really  the  income  she  receives  from  for- 
eign investments  and  freight  earnings  in  the  carrying 
trade. 

But  the  imports  and  exports  between  any  two  nations 
may  or  may  not  balance.  What  is  meant  by  the  "  equation 
of  international  demand  "  is  that  the  imports  and  exports 


THE   ALTERNATIVES  OFFERED   US.  135 

of  each  nation  with  all  foreign  countries  must  in  the  long 
run  balance.  The  tea  we  buy  of  China  is  paid  for  in  cotton 
we  sell  to  England,  or  the  coffee  we  buy  from  Brazil  may 
be  paid  for  in  tobacco  sold  to  France.  The  balance  in  the 
long  account  current  with  all  foreign  countries  is  paid  in 
money.  The  free-trader  is  fond  of  saying  that  protection 
is  "  the  loathsome  offspring  "  (!)  of  the  old  mercantile  theory 
of  political  economy,  according  to  which  a  nation  thought 
it  made  the  greatest  gains  when  it  had  the  largest  "  bal- 
ance of  trade,"  payable  in  money,  in  its  favor.  When  all 
other  arguments  fail,  he  hurls  this  old  boomerang.  A  pro- 
tectionist has  no  more  call  to  believe  in  the  mercantile 
theory  than  the  free-trader.  In  fact,  bulhon  plays  a  very 
small  part  in  foreign  commerce.  When  large  exportation 
of  that  is  required,  trade  stops. 

Less  than  one  half  of  all  the  merchandise  imported  into 
the  United  States  is  in  manufactured  goods ;  and  of  these 
very  much  the  larger  parts  consist  of  silks  and  velvets,  and 
fine  woolen  goods  and  kid  gloves,  French  wines  and  china, 
which  are  articles  of  luxury. 

However  much  we  might  be  disposed  in  the  United 
States  to  look  to  other  countries  for  our  supplies  of  manu- 
factured goods,  we  can  only  obtain  them  to  the  extent  to 
which  other  countries  need  our  products.  Our  consump- 
tion of  such  goods  will,  therefore,  be  not  in  proportion  to 
the  power  of  domestic  production  and  the  wants  of  the 
people  here,  but  to  the  desire  of  other  countries  to  have 
our  commodities. 

So  that  we  may  invert  Prof.  Perry's  key-stone,  "  If  a 
nation  will  not  buy  of  foreigners,  it  can  not  sell  to  them," 
and  say,  "  If  foreigners  icill  not  buy  of  us,  we  can  not  buy 
of  them,"  and  then  his  arch  is  liable  to  fall.  But  then  it 
will  not  fall  far,  and,  besides,  it  was  not  much  of  an  arch 
anyway. 


136  PROTECTION  VS.   FREE  TRADE. 

If  we  confine  ourselves  to  tlie  production  of  our  fertile 
fields,  to  wliat  extent  will  the  markets  of  tlie  world  take 
them  ?  This  is  the  everlasting  issue  in  the  case,  as  raised 
by  the  scientific  free-trader,  who  insists  on  science.  From 
1789  to  1884  it  has  been  unceasingly  asked  by  statesmen, 
by  farmers,  by  laborers.  I  notice  that  the  theoretical  pro- 
fessors never  attempt  an  answer.  "Why  do  not  the  pupils 
who  sit  under  their  teachings  insist  on  a  definite,  specific 
answer  to  it,  and  insist  that  there  shall  be  no  flinching? 
For  myself,  I  make  no  question  that,  with  free  trade,  agri- 
culture would,  by  this  time,  have  been  so  unprofitable  that 
"  mills  and  factories  "  would  have  come  in  naturally.  We 
would  have  been  so  poor  that  we  conld  have  competed,  un- 
der the  regime  of  low  wages,  with  Europe ;  rather,  we 
should  neither  have  had  anything  to  sell  nor  wanted  to 
buy  anything.  "VVe  should  have  backslidden  out  of  the 
contest. 

It  is  before  this  question  that  the  American  people  and 
the  American  farmers  have  balked,  and  have  refused  to 
trust  in  free  trade.  That  instinct  was  correct,  and  can  not 
be  overridden  by  anything  but  stern  facts — theoretical  dis- 
quisition about  what  might  have  been  or  what  ought  to 
have  been,  fail  to  convict  their  judgment. 

I  wish  the  professors  would  try  their  hand  at  this,  as  a 
question  of  fact. 

Alexander  Hamilton,  in  his  Treasury  Report  of  1791, 
laid  the  basis  for  the  protective  system,  and  it  was  in  the 
presence  of  this  unanswered  question  that  the  protective 
policy  was  adopted.  Washington,  Franklin,  Jefferson, 
Madison,  Monroe,  and  Jackson  are  all  distinctly  on  record 
as  solicitous  to  find  a  vent  for  our  surplus  food-products. 
Failing  to  see  any  adequate  foreign  market,  they  turned  to 
the  much-derided  liome  market.  Distinguished  professors 
affect  to  believe  that  they  have  undone  its  economic  effects 


THE  ALTERNATIVES   OFFERED   US.  J 37 

wlien  tliey  dismiss  it,  as  one  professor  did  in  his  address 
before  the  recent  tariff  commission,  with  the  contemptuous, 
"  Oh,  that  is  the  famous  truck-farm  argument."  Hamil- 
ton's report  will  be  referred  to  in  other  connections.^ 

It  must  be  borne  in  mind  that  Hamilton,  Franklin, 
and  their  associates  were  gazing  into  the  inmost  nature  of 
the  problem  wdien  its  elements  were  simple  and  capable 
of  disentanglement,  when  there  was  no  danger  of  falling 
into  an  ambuscade  of  intricate  figures  or  bad  logic.  They 
knew  what  they  wanted,  and  adopted  the  only  plan  open 
to  them  to  supply  their  wants. 

Frankhn,  writing  from  London  in  1771,  says : 
"  If  our  Country  People  would  well  consider  that  all 
they  save  in  refusing  to  purchase  foreign  Gewgaws  and  in 
making  their  own  Apj)arel  being  apply'd  to  the  Improve- 
ment of  their  Plantations,  would  render  those  more  profit- 
able, and  yielding  a  greater  Produce,  I  should  hope  they 
would  j)ersue  resolutely  in  their  present  commendable  In- 
dustry and  FrugaHty.  And  there  is  still  a  further  Consid- 
eration. The  Colonies  that  produce  Provision  grow  very 
fast.  But  of  the  Countries  that  take  off  those  Provisions, 
some  do  not  increase  at  all,  as  the  European  JSTations ;  and 
others,  as  the  West  India  Colonies,  not  in  the  same  propor- 
tion. So  that,  tho'  the  Demand  at  present  may  be  suffi- 
cient, it  cannot  long  continue  so.  Every  Manufacture 
encouraged  in  our  Country,  makes  part  of  a  Market  for 
Provisions  within  ourselves,  and  saves  so  much  Money  to 

*  Hamilton's  Treasury  Report  is  the  great  magazine  of  the  scientific 
weapons  of  the  protectionist.  No  improvement  has  been  made  in  the  for- 
mulation of  his  propositions ;  but  they  have  been  made  luminous  by  the 
facts  of  our  history.  No  free-trader  has  ever  leaped  the  ditches  or  scaled 
the  parapet  of  his  impregnable  fortress.  His  bastions  command  the  entire 
front.  The  professors  hurled  their  little  hand-grenade,  "  mercantile  theory," 
at  him.  But  when  he  himself  denounced  it  as  "  the  vain  project  of  selling 
everything  and  buying  nothing,"  that  dynamite  failed  to  explode. 


138  PROTECTION  VS.   FREE  TRADE. 

the  Country  as  must  otherwise  be  exported  to  pay  for  the 
manufactures  he  supplies.  Here  in  England  it  is  well 
known  and  understood  that  wherever  a  Manufacture  is 
established  which  employs  a  dumber  of  Hands,  it  raises 
the  Value  of  Lands  in  the  neighboring  country  all  around 
it,  partly  by  the  greater  Demand  near  at  hand  for  the 
Produce  of  the  Land  ;  and  partly  from  the  Plenty  of 
Money  drawn  by  the  manufactm*es  of  that  Part  of  the 
Country.  It  seems,  therefore,  that  the  Interest  of  all  our 
Farmers  and  Owners  of  Lands,  to  encourage  our  young 
Manufactures  in  preference  to  foreign  ones  imported 
among  us  from  distant  Countries." 

Upon  the  market  for  surplus  agricultural  products 
Hamilton  says : 

"  But  it  is  also  a  consequence  of  the  policy  which  has 
been  noted  that  the  foreign  demand  for  the  products  of 
agricultural  countries  is,  in  a  great  degree,  rather  casual 
and  occasional  than  certain  or  constant.  To  what  extent 
injurious  interruptions  of  the  demand  for  some  of  the  sta- 
ple commodities  of  the  United  States  may  have  been  ex- 
perienced from  that  cause,  must  be  referred  to  the  judg- 
ment of  those  who  are  engaged  in  carrying  on  the  commerce 
of  the  country ;  but  it  may  be  safely  affirmed  that  such 
Interruptions  are  at  times  very  inconveniently  felt,  and 
that  cases  not  unfrequently  occur  in  which  markets  are  so 
confined  and  restricted  as  to  render  the  demand  very  un- 
equal to  the  supply. 

"  Independently,  hkewise,  of  the  artificial  impediments 
which  are  created  by  the  pohcy  in  question,  there  are  natu- 
ral causes  tending  to  render  the  external  demand  for  the 
surplus  of  agricultural  nations  a  precarious  reliance.  The 
differences  of  seasons,  in  the  countries  which  are  consum- 
ers, make  immense  differences  in  the  j^roduce  of  their  own 
soils  in  different  years,  and  consequently  in  the  degrees  of 


THE   ALTERNATIVES   OFFEKED   US.  I39 

their  necessity  for  foreign  snpply.  Plentiful  harvests 
with  them — especially  if  similar  ones  occur  at  the  same 
time  in  the  countries  which  are  furnishers — occasion,  of 
course,  a  glut  in  the  marhets  of  the  latter} 

'  "  As  to  the  creating,  in  some  instances,  a  new,  and  securing  in  all  a  more 
certain  and  steady  demand  for  the  surplus  produce  of  the  soil : 

"  This  is  among  the  most  important  of  the  circumstances  which  have  been 
indicated.  It  is  a  principal  means  by  which  the  estabhshment  of  manufact- 
ures contributes  to  an  augmentation  of  the  produce  or  revenue  of  a  coun- 
try, and  has  an  immediate  and  direct  relation  to  the  prosperity  of  agriculture. 

"  It  is  evident  that  the  exertions  of  the  husbandman  will  be  steady  or 
fluctuating,  vigorous  or  feeble,  in  proportion  to  the  steadiness  or  fluctuation, 
adequateness  or  inadequateness  of  the  markets  on  which  he  must  depend  for 
the  vent  of  the  surplus  which  may  be  produced  by  his  labor ;  and  that  such 
surplus,  in  the  ordinary  course  of  things,  will  be  greater  or  less  in  the  same 
proportion. 

"  For  the  purpose  of  this  vent  a  domestic  market  is  greatly  to  be  pre- 
ferred to  a  foreign  one,  because  it  is,  in  the  nature  of  things,  far  more  to  be 
relied  upon. 

"  It  is  a  primary  object  of  the  policy  of  nations  to  be  able  to  supply 
themselves  with  subsistence  from  their  own  soils ;  and  manufacturing  na- 
tions, as  far  as  circumstances  permit,  endeavor  to  procure  from  the  same 
source  the  raw  materials  necessary  for  their  own  fabrics.  This  disposition, 
urged  by  the  spirit  of  monopoly,  is  sometimes  even  carried  to  an  injudicious 
extreme.  It  seems  not  always  to  be  recollected  that  nations  who  have  neither 
mines  nor  manufactures  can  only  obtain  the  manufactured  articles  of  which 
they  stand  in  need  by  an  exchange  of  the  products  of  their  soils,  and  that, 
if  those  who  can  best  furnish  them  with  such  articles  are  not  willing  to  give 
a  due  course  to  this  exchange,  they  must  of  necessity  make  every  possible 
effort  to  manufacture  for  themselves  ;  the  eflect  of  which  is  that  the  manu- 
facturing nations  abridge  the  natural  advantages  of  their  situation  through 
an  unwillingness  to  permit  the  agricultural  countries  to  enjoy  the  advantages 
of  theirs,  and  sacrifice  the  interests  of  a  mutually  beneficial  intercourse  to 
the  vain  project  of  selling  everything  and  buying  nothing."  (We  shall  have 
occasion,  hereafter,  to  note  the  impossible  feat  which  certain  known  reformers 
in  our  day  propose,  to  wit,  to  export  both  food,  raw  materials,  and  manufact- 
ured goods  to  the  rest  of  the  world.  This  starts  the  natural  query,  What, 
then,  is  the  rest  of  the  world  to  do  for  us  ?)  .  .  . 

"  Considering  how  fast  and  how  much  the  progress  of  new  settlements 
in  the  United  States  must  increase  the  surplus  produce  of  the  soil,  and 


140  PROTECTION  VS.   FEEE  TRADE. 

James  Madison  (message,  Febraary,  1815) : 
"  But  there  is  no  subject  that  can  enter  with  greater 
force  and  merit  into  the  deliberations  of  Congress  than 

weighing  seriously  the  tendency  of  the  system  which  prevails  among  most 
of  the  commercial  nations  of  Europe,  whatever  dependence  may  be  placed 
on  the  force  of  natural  circumstances  to  counteract  the  effect  of  an  artificial 
policy,  there  appear  strong  reasons  to  regard  the  foreign  demand  for  that 
surplus  as  too  uncertain  a  reliance,  and  to  desire  a  substitute  for  it  in  an 
extensive  domestic  market. 

"  To  secure  such  a  market,  there  is  no  other  expedient  than  to  promote 
manufacturing  establishments.  Manufacturers,  who  constitute  the  most  nu- 
merous class,  after  the  cultivators  of  land,  are  for  that  reason  the  principal 
consumers  of  the  surplus  of  their  labor. 

"  This  idea  of  an  extensive  domestic  market  for  the  surplus  produce  of 
the  soil  is  of  the  first  consequence.  It  is  of  all  things  that  which  most 
effectually  conduces  to  a  flourishing  state  of  agriculture.  If  the  effect  of 
manufactories  should  be  to  detacli  a  portion  of  the  hands,  which  would  be 
otherwise  engaged  in  tillage,  it  might  possibly  cause  a  smaller  quantity  of 
lands  to  be  under  cultivation  ;  but,  by  their  tendency  to  produce  a  more  cer- 
tain demand  for  the  surplus  produce  of  the  soil,  they  would,  at  the  same 
time,  cause  the  lands  which  were  in  cultivation  to  be  better  improved  and 
more  productive.  And  while,  by  their  influence,  the  condition  of  each  in- 
dividual farmer  would  be  ameliorated,  the  total  mass  of  agricultural  produc- 
tion would  probably  be  increased,  for  this  must  evidently  depend  as  much, 
if  not  more,  upon  the  degree  of  improvement  as  upon  the  number  of  acres 
under  culture. 

"It  merits  particular  observation,  that  the  multiplication  of  manufac- 
tories not  only  furnishes  a  market  for  these  articles  which  have  been  accus- 
tomed to  be  produced  in  abundance  in  a  country,  but  it  likewise  creates  a 
demand  for  such  as  were  either  unknown  or  produced  in  inconsiderable 
quantities ;  the  bowels  as  well  as  the  surface  of  the  earth  are  ransacked  for 
articles  which  were  before  neglected,  animals,  plants,  and  minerals  acquire 
a  utility  and  value,  which  were  before  unexplored. 

"The  foregoing  considerations  seem  sufficient  to  establish  as  general 
propositions  that  it  is  the  interest  of  nations  to  diversify  the  industrious 
pursuits  of  the  individuals  who  compose  them.  That  the  establishment  of 
manufactures  is  calculated  not  only  to  increase  the  general  stock  of  useful 
and  productive  labor,  but  even  to  improve  the  state  of  agriculture  in  par- 
ticular, certainly  to  advance  the  interests  of  those  who  are  engaged  in  it. 
There  are  other  views  that  will  be  hereafter  taken  of  the  subject,  which,  it 
is  conceived,  will  serve  to  confirm  these  inferences," 


THE   ALTERNATIVES   OFFERED   US.  141 

a  consideration  of  the  means  to  preserve  and  promote  tlie 
mannfactnres  which  have  sprung  into  existence,  and  at- 
tained an  unparalleled  maturity  throughout  the  United 
States  during  the  period  of  the  European  wars.  This 
source  of  national  independence  and  wealth  I  anxiously 
recommend,  therefore,  to  the  prompt  and  constant  guard- 
ianship of  Congress." 

John  C.  Calhoun  (speech,  Tariff  Act,  1816) : 
"  When  our  manufactures  are  grown  to  a  certain  pro- 
portion, as  they  will  under  the  fostering  care  of  the  Gov- 
ernment, the  farmer  will  find  a  ready  market  for  his  sur- 
plus produce,  and,  what  is  of  equal  consequence,  a  certain 
and  cheap  supply  for  all  his  wants.  His  prosperity  will 
diffuse  itself  to  every  class  in  the  community,  and,  instead 
of  the  languor  of  industry  and  individual  distress  now 
incident  to  a  state  of  war  and  suspended  commerce,  the 
wealth  and  vigor  of  the  community  will  not  be  impaired." 
Andrew  Jackson  (Coleman  letter,  1821) : 
"  This  tariff — I  mean  a  judicious  one — possesses  more 
fanciful  than  real  danger.  I  will  ask  what  is  the  real  situa- 
tion of  the  agriculturist  ?  Where  has  the  American  farmer 
a  market  for  his  surplus  product  ?  Except  for  cotton,  he 
has  neither  a  foreign  nor  home  market.  Does  not  this 
prove,  where  there  is  no  market,  either  at  home  or  abroad, 
that  there  is  too  much  labor  emjyloyed  in  agriculture^ 
and  that  the  channels  for  labor  should  be  multiplied  \ 
Common  sense  points  out  the  remedy.''^  ^ 

*  In  1824  Andrew  Jackson  wrote  to  Dr.  Coleman  inter  alia  these  words: 
"  This  tariff — I  mean  a  judicious  one — possesses  more  fanciful  than  real 
danger.  I  will  ask,  what  is  the  real  situation  of  the  agriculturist  ?  Where 
has  the  American  farmer  a  market  for  his  surplus  product?  Except  for 
cotton,  he  has  neither  a  foreign  nor  home  market.  Does  not  this  clearly  prove, 
where  there  is  no  market  either  at  home  or  abroad,  that  there  is  too  much 
labor  employed  in  agriculture,  and  that  the  channels  for  labor  should  be 
multiplied  ?     Common  sense  points  out  the  remedy.     Draw  from  agriculture 


142  PROTECTION  VS.   FREE  TRADE. 

Mr.  Webster  1  (speech  on  tlie  Tariff  Act,  1824) : 
"  Sir,  that  is  the  truest  American  policy  which  shall 
most  usefully   employ  American    caj)ital   and   American 
labor,  and  best  sustain  the  whole  population.     With  me  it 

the  superabundant  labor ;  employ  it  in  mechanism  and  manufactures,  thereby 
creating  a  home  market  for  your  brcadstuffs,  and  distributing  labor  to  the 
most  profitable  account  and  benefits  to  the  country.  Take  from  agriculture 
in  the  United  States  six  hundred  thousand  men,  women,  and  children,  and  you 
will  at  once  give  a  home  market  for  more  brcadstuffs  than  all  Europe  now 
furnish  us  a  market  for.  In  short,  we  have  been  too  long  subject  to  the 
policy  of  British  merchants.  It  is  time  that  we  shall  become  a  little  more 
Americanized,  and  instead  of  feeding  the  paupers  and  laborers  of  England, 
feed  our  own;  or  else,  in  a  short  time,  by  continuing  our  present  policy,  we 
shall  be  rendered  paupers  ourselves." 

*  Mr.  Webster  saw  the  beneficent  operation  of  the  tariff  of  1828 — ^the 
"  tariff  of  abominations  "  for  which  he  voted — the  disappearance  of  socie- 
tary  activity  under  the  horizontal  ad  valorem  tariff  of  1S32,  and  the  refluent 
wave  of  prosperity  under  the  tariff  of  1842.  It  was  observation  and  analysis 
of  those  phenomena  which  transferred  Henry  C.  Carey  from  the  atomistic 
views  of  the  free-traders,  with  whom  he  stood  when  he  wrote  his  unpublished 
"  The  Hannony  of  Nature,"  in  1836,  to  an  advocate  of  protection  in  1844. 
They  had  both  outgrown  the  atomistic  view  of  society  as  a  mass  of  independ- 
ent units,  each  taking  care  of  himself  in  the  markets  of  the  world.  What 
men  in  society  need  is  the  wages  of  labor — returns  for  employment.  If  Mr. 
Webster  did  not  understand  political  economy  in  1824,  as  is  charged,  he  seems 
to  have  come  in  sight  of  some  of  its  doctrines  in  1846.  In  his  speech  in  the 
Senate  in  that  year  he  said :  "  To  diversify  employment  is  to  increase  employ- 
ment, and  to  enhance  wages,  and,  sir,  take  this  great  truth,  place  it  on  the 
title-page  of  every  book  of  political  cconpmy  intended  for  the  use  of  the 
United  States,  put  it  in  every  '  Farmer's  Almanac,'  let  it  be  the  heading  of 
the  column  in  every  '  Mechanic's  Magazine,'  proclaim  it  everywhere  and 
make  it  a  proverb  that,  2vhen  there  is  loork  for  the  hands  of  men,  there  will  be 
work  for  their  teeth.  When  there  is  employment  there  will  be  bread.  It  is 
a  great  blessing  to  the  poor  to  have  cheap  food ;  but  greater  than  that,  prior 
to  that,  and  of  still  higher  value,  is  the  blessing  of  being  able  to  buy  food  by 
honest  and  respectable  employment.  Employment  feeds  and  clothes  and  in- 
structs. Employment  gives  health,  sobriety,  and  morals.  Constant  employ, 
ment  and  well-paid  labor  produce,  in  a  country  like  ours,  general  prosperity, 
content,  and  cheerfulness.  Our  destiny  is  labor.  What  is  the  first  great 
cause  of  prosperity  with  such  a  people  ?     Simply  employment.     Cheap  food 


TUE   ALTERNATIVES   OFFERED   US.  143 

is  a  fundamental  axiom,  it  is  interwoven  with  all  my  opin- 
ions, that  the  great  interests  of  the  country  are  united  and 
inseparable,  that  agriculture,  commerce,  and  manufactures 
will  prosper  together  or  languish  together,"  .  .  .  While  he 
was  opposed  to  total  prohibition,  to  the  attempt  "  to  raise 
up  at  home  manufactures  not  suited  to  the  climate,  the 
nature  of  the  country,  or  the  state  of  the  population,  there 
were  substantial  distinctions  to  be  made,"  and  it  was  possi- 
ble "  to  awaken  a  home  competition  in  the  production  of 
some  articles.  ...  I  think  freedom  of  trade  to  be  the  gen- 
eral principle,  and  restriction  the  exception,  and  it  is  for 
every  state,  taking  into  view  its  own  conditions,  to  judge 
of  the  propriety  in  any  case  of  making  an  exception.  .  .  . 

"  In  the  next  place,  there  never  was  any  reason  to  ex- 
pect that  the  increase  of  our  exjports  of  agricultitral  prod- 
nets  would  keep  pace  with  the  increase  of  our  'population. 
That  would  be  against  all  experience." 

It  is  sad  to  think  how  many  economical  blunders  these 
statesmen  have  worked  into  these  short  paragraphs.  In 
order  to  confer  some  exchange  value  on  the  farmer's  prod- 
ucts, and  to  have  them  consumed  at  home,  in  the  interest 
of  the  greatest  annual  product  of  American  industry,  and 
to  the  end  of  securing  the  greatest  annual  income  of  the 
American  people — the  highest  aggregate  of  their  gross 
annual  rent,  wages,  and  profits — out  of  which  each  worker 
gets  his  share,  Washington,  Hamilton,  Jefferson,  Madison, 
Calhoun,  Jackson,  and  AVebster  proposed,  in  the  language 
of  the  modem  a  priori  college  professors,  "  to  take  away 
one  man's  earnings  to  give  them  to  another,"  "  to  enable 
one  citizen  to  collect  taxes  of  another,"  "  to  confer  a  favor 
on  one  group  of  its  population  by  an  equivalent  oppression 

and  cheap  clothing  are  very  desirable ;  but  they  are  not  the  first  requisites. 
The  first  requisite  is  that  which  enables  men  to  buy  food  and  clothing,  cheap 
or  dear." 


144  PROTECTION  VS.   FREE  TRADE. 

exerted  on  another,"  "  to  produce  forced  monopolies  and 
distorted  industrial  relations,"  "  to  introduce  that  industrial 
abomination,  an  industry  that  does  not  pay,"  "  to  create 
parasite  industries  to  live  on  the  exuberant  productions  of 
the  natural  industries  "  ;  "  pauper,  of  course,  is  one  of  those 
silly  and  invidious  terms  which  have  been  introduced  into 
this  discussion,  in  the  interest  of  falsehood  and  folly"  ;  and, 
finally,  they  are  "  Anglophobists"  !  And  all  this  evolved 
out  of  "  common  sense  "  !  All  this  trouble,  in  order  "  to 
build  up  Gomjyeting  manufactures  "  !  exclaim  the  professors. 

The  demand  of  the  outer  world  for  the  food  and  raw 
materials  of  this  country  never  has  increased,  and  never 
will  increase,  as  fast  as  our  population ;  besides,  we  can  ex- 
port no  part  of  our  perishable  products.  At  the  moment 
in  1885  when  tbese  lines  are  being  written,  there  is  no  de- 
mand in  any  European  market  for  American  flour,  and  its 
exchange  value  in  the  home  market  is  greater  than  that  in 
the  foreign  market,  and  this  in  the  face  of  the  fact  that 
nearly  one  quarter  of  our  population  has  been  diverted 
from  agricultural  to  mechanical  pursuits !  If  all  American 
labor  and  American  capital  had  been  devoted  to  our  "  most 
advantageous  industry,"  is  there  any  rational  doubt  of  the 
destructive  terms  on  which  we  should  have  supplied  our 
wants  of  foreign  commodities  by  exchange  ?  ^  What  does 
the  farmer  think  % 

Between  ITSi  and  1884,  without  attempting  any  his- 
torical details,  there  have  been  years  when,  under  a  succes- 
sion of  bad  harvests  abroad,  coinciding  with  good  crops  at 

^  We  are  now,  as  indeed  we  always  have  been,  in  the  dilemma  above 
quoted  from  Prof.  Perry :  "  The  product  for  which  the  demand  is  less  will 
find  its  market  shic^gish,  and,  in  order  to  tempt  further  and  brisker  exchanges, 
will  be  compelled  to  offer  more  favorable  conditions.  He  who  enters  a 
market  in  quest  of  what  is  more  in  demand,  with  a  service  in  return  which  is 
less  in  demand,  will  have  to  lower  his  terms,  or  not  trade.'''' 


THE  ALTERNATIVES  OFFERED  US.         I45 

home,  we  have  reaped  enormous  gains ;  and  there  have  been 
years  in  which  corn  has  been  burned  on  the  Western  prairies 
for  fuel.  A  nation  of  fifty  millions  of  people  will  scarcely 
risk  their  economic  welfare  on  chances  so  doubtful  as  these. 

It  follows  from  his  principles,  says  Prof,  Perry,  "  that 
those  men,  who  deem  it  needful  that  each  nation  should  be 
able  to  compete  with  other  nations,  are  shallow  thinkers. 
Why  are  they  not  consistent  enough  to  apply  their  favorite 
doctrine  of  '  competing '  to  domestic  exchanges  also,  and 
demand  that  the  clergyman  shall  have  facilities  for  '  com- 
peting' with  the  lawyer,  the  tailor  with  the  blacksmith, 
the  farmer  with  the  manufacturer,  the  jDublisher  with  the 
author  ?  Will  people  never  learn  that  all  exchanges,  do- 
mestic as  well  as  foreign,  depend  on  relative  superiority  at 
different  points,  and  that  a  nation  which  should  try  to  make 
its  success  in  production  equal  at  all  j)oints,  would  be  as 
foolish  as  an  artisan  trying  to  learn  and  practice  all  trades 
at  once  ?  Suppose  the  nation  to  succeed,  what  then  ?  It 
would  supply  its  wants  at  a  certain  average  efficiency  of 
effort ;  whereas,  by  a  thorough  development  of  all  its  own 
peculiar  resources,  it  could  command  by  exchange  the 
products  of  the  world  at  a  cost  not  exceeding  that  of  its 
own  most  productive  and  efficient  exertions." 

If  the  Professor  had  included  all  his  qualifying  doc- 
trines and  all  the  fafcts  of  our  commerce,  and  had  not  in- 
terjected irrelevant  matter  into  these  few  lines,  there  would 
be  left  no  subject  of  dispute.  The  insurmountable  fact, 
which  the  Professor  omits,  is  that  the  world's  market  has 
never  offered  the  chance  to  us  to  buy  the  manufactured 
goods  we  consume,  and  that  we  are  compelled  to  make  a 
portion  of  them,  and  for  that  portion  we  are  necessarily  in 
"competition"  with  foreign  labor  and  capital.^     He  is  dis- 

'  In  his  water-level  illustration  used  above,  the  Professor  says  that  the 
conditions  of  a  trade  equally  profitable  to  both  parties  require  "  that  the  de- 


146  PROTECTIOX    VS.  FREE  TRADE. 

cussing  the  role  wliicli  tlie  United  States  ought  to  play  in 
the  "international  division  of  labor."  An  artisan's  effi- 
ciency may  well  lie  in  a  single  direction,  but  a  nation  is 
many-sided  —  the  United  States  is  well-nigh  all-sided :  it 
has  proved  its  capacity  "  to  learn  and  j)ractice  all  trades  at 
once." 

He  is  endeavoring  to  ascertain  what  we  ought  to  pro- 
duce so  that  we  may  not  commit  the  absurdity  of  "  com- 
peting" with  other  nations.  K  there  was  not  anything 
that  we  could  do  to  more  advantage  than  any  other  nation, 
that  would  be  an  indication,  on  his  economic  argument, 
either  that  we  ought  not  to  have  come  here  at  all,  or  that 
some  of  us  ouglit  to  emigrate  forthwith.  But  suppose  we 
have  the  same  advantages  as  other  nations  ?  If  there  was 
no  work  for  the  clergyman,  the  lawyer,  the  tailor,  or  the 
blacksmith,  as  such,  then  none  of  them  ought  to  exist,  as 
such,  exclusively,  and  probably  they  would  not  exist  long. 
But  each  man  primarily  pursues  one  of  these  callmgs  for 
the  sake  of  making  a  hving,  and  he  expects  to  do  this  by 
the  exchange  of  services  with  others.  So  far  forth  as  there 
is  no  demand  for  his  services  in  his  special  calling,  so  far 
fortli  he  must  "  try  to  learn  and  practice  "  some  other  call- 
ing in  connection  with  it — he  must  average  his  efforts. 
With  a  full  opportunity  to  sell  all  the  products  of  his  own 
calhng,  he  will  have  to  "  compete "  with  nobody  except 

mand  for  French  silks  in  England  jitst  answers  to  the  demand  for  English 
cottons  in  France,  so  that  the  silks  offered  by  France  just  pay  for  the  cottons  ' 
offered  by  England."  Translated  into  the  language  of  our  American  problem 
that  would  be,  "  that  the  demand  for  American  food  and  raw  materials  in 
Europe  and  Great  Britain  just  answers  to  the  demand  for  foreign  manufact- 
ured goods  in  the  United  States,  so  that  the  food  and  raw  materials  offered 
by  the  United  States  just  pay  for  the  manufactured  goods  offered  by  Europe 
and  Great  Britain."  The  argument  doesn't  fit,  and  the  illustration  lacks 
applicability.  Europe  and  Great  Britain  have  never  yet  taken  enough  of  our 
food  and  raw  materials  to  pay  for  one  tenth  of  our  demand  for  manufactured 
goods.     (See  Chapter  X,  infra) 


THE  ALTERNATIVES   OFFERED   US.  I47 

those  in  tlie  same  industry.  He  will  have  no  "  competi- 
tion" with  his  customers.  If  he  can  not  live  on  his  salary 
as  a  clergyman,  he  may  be  compelled  to  eke  out  his  liveli- 
hood by  "competing"  at  times  with  the  schoolmaster.  If 
he  is  not  "  all-sided,"  he  must  come  under  the  very  first 
limitation  imposed  by  xVdam  Smith  in  his  chapter  on  the 
"Division  of  Labor,"  the  most  important  chapter  in  his 
"  Wealth  of  I^ations,"  "  The  division  of  labor  is  limited 
by  the  extent  of  the  market."  Smith  cites  the  manufact- 
ure of  pins  in  illustration :  In  his  day  ten  men,  by  divis- 
ion of  labor,  could  make  48,000  pins  a  day ;  whereas,  with- 
out it,  they  could  only  make  200.  Suppose,  now,  the 
artisans  who  supervise  the  process  can  make  48,000  pins, 
and  that  there  is  only  a  demand  for  24,000  pins  a  day.  In 
that  case,  the  artisans  must  be  idle  half  the  time.  Pro- 
duction at  that  establishment  would  be  most  profitable  only 
when  the  market  took  an  output  of  pins  to  the  number  of 
48,000.  An  overjproduction  of  ])'ins  would  lead  to  loss 
and  waste  unless  they  could  be  utilized  as  a  first  step  in 
the  jproduction  of  something  else,  for  they  would  possess 
no  exchange  value  as  pins.  Now,  Prof.  Perry  wants  the 
international  division  of  labor  so  made  among  the  different 
nations  of  the  earth  that  the  United  States  shall  enter  upon 
that  industry  upon  which  it  can  expend  "  its  own  most  pro- 
ductive and  efficient  industry."  This  is  agriculture.  As 
in  the  case  of  the  individual  artisan,  the  people  of  the 
United  States  are  here,  primarily,  to  earn  their  subsistence 
and  supply  their  various  wants  and  not  to  produce  exchange 
values.  As  between  themselves,  the  division  of  labor  has 
received  its  perfect  development ;  as  between  the  United 
States  and  the  other  nations,  we  will  exchange  the  surplus 
of  production  in  the  most  advantageous  industry  so  far  as 
there  is  any  market  for  it. 

The  most  perfect  machinery,  and   the  most  absolute 


14:3  PROTECTION    VS.   FREE   TRADE. 

superiority  over  other  producers,  would  avail  notliing  to 
tiie  manufacturer  if  tlie  market  would  not  take  his  pins. 
But  if  pins  were  a  preliminary  stage  of  some  other  salable 
product  for  which  there  was  a  market,  he  would  still  hold 
his  advantage.  He  might  then  manufacture  pins  to  any 
extent.  Convert  them  into  the  next  form  of  commodity, 
and  the  original  siiperiority  he  possessed  would  accom- 
jpany  the  new  industry.  It  might  or  anight  not  he  less 
jprofitahle  than  pin-making,  which  exactly  supplied  the 
market  and  occupied  his  whole  capital  and  lahor,  but  it 
would  be  more  profitable  for  him  than  to  remain  idle,  and 
would  add  more  to  the  gross  annual  product  of  the  country 
in  which  he  lived  than  if  he  took  the  establishment  to 
some  other  land.  The  surplus  food  of  America  fulfills  its 
best  purpose  when  it  furnishes  subsistence  to  the  domestic 
artisans  who  are  producing  the  other  commodities  we  use 
— the  surplus  is  only  preparation  for  the  next  stage  of  our 
industrial  labors.  Here  we  come  again  upon  the  triple 
fallacy  which  the  free-trader  must  employ — that  all  capital 
and  labor  can  be  put  upon  the  most  advantageous  industry 
— that  all  men  work  all  the  time  as  hard  as  they  can,  and 
that  there  is  a  foreign  market  for  all  the  products  of  that 
industry. 

If  the  extent  of  the  foreign  market  is  not  sufiicient  to 
take  up  the  surplus,  we  must  consume  it  in  process  of 
further  manufacture  "  on  the  premises,"  as  in  the  case 
of  the  pin-manufacturer.  But  when  we  come  to  see  in 
what  form  it  shall  be  consumed,  we  find  at  once  that 
we  are  in  "  competition  "  with  other  nations.  Unless  we 
waste  our  sui'plus,  and  waste  our  time  and  keep  standing 
idle  the  labor  which  produced  the  surplus,  we  must  "  com- 
pete," and  we  can  only  successfully  "  compete "  by  re- 
striction. We  do  not  seek  "  competition " ;  it  is  forced 
upon  us.      If  our  wants  are  to  be  supplied,  it  may  be 


THE   ALTERNATIVES   OFFERED   US.  149 

compiilsoiy  upon  us  to  satisfy  them  ourselves  at  "  a  cer- 
tain average  efficiency  of  efiort."  Our  division  of  labor 
lias  been  pushed  too  far ;  we  have  accepted  a  line  of  in- 
dustry— agricultural — which  keeps  us  on  half-time  to  avoid 
overproduction.  The  alternative  is  to  adopt  other  indus- 
tries in  connection  with  them,  which  may  indeed  reduce  us 
to  some  "  average  efficiency "  only ;  or,  to  dismiss  our  la- 
borei-s,  remit  our  capital,  and  redistribute  them  to  other 
national  departments  of  the  international  division  of  labor. 
The  world's  commerce  did  not  need  us  all  to  supply  its  de- 
ficiencies at  the  point  of  our  relative  superiority.  We  in 
this  political  body-politic  miscalculated  our  functions  in 
the  cosmopolitan  industrial  body-politic  ;  our  structure  was 
on  too  large  a  scale,  and  our  functions  cease.  The  result  is 
we  have  miscarried  ;  we  are  prematurely  on  hand.  "  Will 
people  never  learn  "  that  if  the  inhabitants  of  the  United 
States  are  here  to  supply  certain  exchange  values  to  inter- 
national trade,  there  are  too  many  of  us,  and  our  "  own 
peculiar  resources  "  are  too  prolific  for  current  commercial 
needs  ?  "  Will  people  never  learn  "  that  if  the  inliabitants 
of  the  United  States  are  here  to  earn  the  means  of  subsist- 
ence by  honest,  honorable,  cheerful  work,  all  "our  most 
productive  and  efficient  exertions"  can  not  be  put  forth  in 
the  presence  of  a  foreign  "competition"  which  drives  us 
out  of  the  field  ?  So  many  of  the  products  of  the  world  as 
we  can  not  command  from  our  own  most  productive  forces, 
we  must  be  willing  to  procure  by  domestic  exchanges 
made  at  only  "  a  certain  average  efficiency  of  effort." 

But  there  is  a  still  further  limitation  to  the  division  of 
labor — the  nature  of  the  employment.  Of  all  the  depart- 
ments of  industry,  agriculture  allows  of  the  least  division 
of  labor,  and,  at  best,  the  labor  is  rude.  Machinery  has 
been  used  with  some  efficiency,  but  no  machinery  can  over- 
come the  loss  of  time,  the  delay  of  the  seasons,  which  must 


150  PROTECTION    VS.  FREE  TRADE. 

attend  the  processes  of  planting,  growing,  and  reaping. 
The  natural  industries  of  this  country  are  the  ones  in  which 
increased  productions  ai*e  made  under  increasingly  higher 
cost ;  labor,  expended  on  the  soil,  will  reap  rewards  con- 
stantly growing  less.  Exchange  values  may  not  decrease 
fi'om  tliis  cause,  hut  the  iucreased  cost  of  production  will 
diminish  the  farmer  s  profit.  Agriculture  is  subject  to  "  the 
law  of  diminishing  returns."  ^ 

There  were  moral  and  economic  reasons  why  "Washing- 
ton, and  Hamilton,  and  Jefferson,  and  Madison,  who  stood 
at  the  beginning  of  things,  deemed  it  a  betrayal  of  the  in- 
terests of  their  posterity  to  limit  the  productive  energies 
of  the  people  to  raw  materials,  and  then  to  such  quantities 
only  as  the  exigencies  of  foreign  markets  might  take  off 
our  hands.  "When  the  authors  of  our  Constitution  invited 
immigration  of  laborers  from  all  the  world — opened  their 
ports  to  free  trade  in  labor  itself — they,  by  a  happy  con- 
sistency, shut  their  ports  to  the  products  of  foreign  labor. 
"Why  does  not  the  free-trader  inveigh  against  the  first  as 
well  as  the  last  ?  The  one  was  the  cause  of  the  other,  and 
this  illimitable  supply  of  labor  the  primary  cause  of  the 
failure  of  his  theories. 

But  the  increase  of  population  and  of  the  power  to 
produce  raw  materials  in  excess  of  any  foreign  demand  has 
in  an  inconceivable  degree  outrun  the  ideas  of  these  early 
statesmen.  There  is,  indeed,  an  immeasurable  power  in 
America  for  these  products,  and  there  is  an  immeasurable 
superiority  at  these  points.  But  the  absolute  superiority  in 
these  advantages  disappears  at  the  instant  when  excess  of 

'  Improved  machinery,  inventions,  new  modes  of  fertilization,  may  retard 
the  effect  of  the  law.  If  the  farmer  cheapens  food  by  raising  more  of  it  at 
less  cost  of  production,  he  is  not  the  loser.  But  if  food  is  cheapened  by 
reason  of  an  unsalable  surplus,  he  is  a  loser.  Cheap  food  is  as  desirable 
to  a  society  as  cheap  anything  else,  but  the  cheapness  ought  to  be  the  result 
of  more  efficient  processes,  not  of  overproduction. 


THE   ALTERNATIVES   OFFERED   US.  151 

production  terminates  in  loss  of  exchange  value.    Then  tlie 
product  must  be  converted  into  some  manufactured  com- 
modity.    Alongside   of   these   absolutely  superior  advan- 
tages are  others  which,  in  comparison  with  these,  may  be 
relatively  less  profitable.     Compared  with  wheat,  here  and 
now,  under  existing  conditions,  iron,  cotton,  woolen,  glass, 
and  pottery  may  (or  may  not,  for  nobody  can  tell)  be  less 
profitable,  in  view  of  exchanges  abroad ;  but  in  these  enu- 
merated manufactures,  in  what  consists  our  inferiority  rel- 
atively to  like  products  abroad  ?     First  and  last,  it  is  in  the 
higher  rate  of  wages  paid  laborers  in  them.    Higher  wages 
mean  greater  comfort  for  the  men  and  women  who  earn 
them.    After  all  the  discords  in  our  system  are  run  through 
the  scale,  they  are  located  in  wages.     It  is  like  the  tuner  of 
the  piano.      Absolutely  exact   intervals   and  harmonious 
chords  are  impossible  over  the  whole  key-board,  so  the 
piano-tuner  pushes  the  discords  all  together — accumulates 
them  all  in  what  he  calls  "  the  wolf  " — and  locates  them  on 
a  single  string.     This  gives  us  the  key  to  the  situation.    If 
the  higher  cost  of  production,  reckoned  in  wages,  is  traced 
to  the  laboring-man,  and  goes  into  the  wages  which  pur- 
chases his  comforts  and  composes  his  welfare,  we  have 
taken  all  discord  out  of  the  diapason — want  of  skill,  or 
capital,  or  efficiency,  is  no  longer  the  source  of  the  trouble. 
We  shall  now  see  that  the  pursuits  of  other  industries, 
while  less  profitable  (than  food-raising  under  conditions 
which  may  be  conceived,  but  were  never  actual),  are  not 
unprofitable  /  we  shall  see  why,  if  they  pay  less,  they  may 
still  pay,  and  we  shall  see  that,  to  the  extent  to  which  they 
pay,  they  are  clear  gain  ;  and  that  if  they  were  not  carried 
on  here,  the  men  and  money  employed  on  them  could  not 
be  employed  at  all  in  this  comitry,  and  their  presence  here 
would  be  an  economic  blunder. 

To  provide  for  diversification  in  the  pursuits  of  a  peo- 


152  PROTECTION  VS.   FREE  TRADE. 

pie  is  not  an  abuse  of  power  on  tlie  part  of  the  Govern- 
ment. Rather,  we  adopt  tlie  judgment  of  M.  Clievalier, 
an  authority  the  free-trader  will  not  care  to  challenge : 
"  On  the  contrary,  it  is  the  accomplishment  of  a  positive 
duty  so  to  act  at  each  epoch  in  the  progress  of  a  nation  as 
to  favor  the  taking  possession  of  all  the  branches  of  indus- 
try whose  acquisition  is  authorhed  hy  the  nature  oftJihujs.''^ 
Protection  does  not  projDOse  to  enter  upon  unnatural  indus- 
tries nor  to  repel  the  gratuities  of  nature ;  but  an  industry 
in  America  in  Avliich  the  only  inferiority  is  in  a  higher 
rate  of  wages  is  not  for  that  reason  either  unnatural  or  un- 
profitable :  nor  are  the  products  of  cheap  foreign  labor  a 
gratuity  morally  or  economically.  The  true  stmggle  of 
humanity  is  against  nature,  and  not  against  itseK ;  it  is  not 
the  struggle  of  humanity  in  one  part  of  the  world  against 
humanity  in  another  part.  Kature  is  the  obstacle  to  be 
overcome,  and  not  other  men.  "  And  here,"  in  the  language 
of  Prof.  Caimes,  "  I  must  in  the  first  place  insist  that  cost 
means  sacrifice,  and  can  not,  without  risk  of  hopelessly  con- 
fusing ideas,  be  identified  with  anything  that  is  not  sacri- 
fice. It  represents  what  man  parts  with  in  the  struggle 
between  him  and  nature,  which  must  be  kept  eternally  dis- 
tinct from  the  return  made  by  nature  on  that  payment. 
This  is  the  essential  nature  of  cost,  and  the  problem  of  cost 
of  production  as  bearing  on  the  theory  of  value  is  to  ascer- 
tain how  far  and  in  what  way  the  payment  thus  made  by 
man  to  nature  in  productive  industry  determines  or  other- 
wise influences  the  exchange  value  of  the  products  which 
result.  Given  the  productions  of  a  man's  industry,  this 
alone  will  not  determine  the  amount  of  his  remunera- 
tion. In  order  to  do  this  we  must  know,  further,  the  pro- 
portion in  which  what  he  produces  will  exchange  for 
what  he  wants — that  is  to  say,  for  the  articles  of  his  con- 
sumption." 


THE   ALTERNATIVES   OFFERED   US.  153 

When  we  have  once  supplied  the  demands  of  the  mar- 
ket with  the  products  of  our  most  efficient  industry,  the 
acceptance  of  the  fruits  of  a  day's  labor  expended  abroad, 
under  natural  conditions  similar  to  ours,  whether  cheap  or 
dear,  is  the  exclusion  of  the  products  of  a  day's  labor  ex- 
pended here,  cheap  or  dear.  It  is  only  a  question  whether 
the  laborer  shall  live  in  America  or  Europe.  If  he  is  to 
live  here,  the  industry  which  employs  him  must  have  pro- 
tection if  it  is  to  surviv^e.  The  free-trader  is  compelled  to 
conclude  that  he  ought  not  to  live  here. 

It  is  a  fundamental  assumption  of  the  free-trader  here 
that  the  exchange  value  of  raw  produce  would  be  kept  at 
present  absolute  rates  if  the  whole  productive  energies  of 
the  United  States  were  employed  on  them.  If  there  are 
any  facts  to  make  good  this  assumption,  it  would  justify 
his  doctrine,  economically.  Biit  if  his  assumption  is  inde- 
fensible, then  the  whole  question  of  superior  advantages 
disappears  and  the  advantages  with  it.  Raising  raw  mate- 
rials is  only  the  most  profitable  industry  because  there  are 
high  returns  of  raw  products  for  little  labor ;  but  the  re- 
wards of  the  labor  when  exchanged  depend  on  the  market 
price  of  the  products.  "What  fair,  decent  claim  is  there, 
then,  for  the  clamorous  assertions  that  this  state  of  prices 
would  continue  under  free  trade  %  On  the  sole  condition 
that  the  relative  price  of  agricultural  products  remains  as  it 
is,  has  the  free-trader  any  warrant  to  call  them  the  most 
advantageous  industries.  What  scientific  warrant  is  there, 
then,  to  declare  the  protected  industries  unprofitable  ?  Con- 
fessedly they  are  only  less  profitable  relatively  to  an  agri- 
culture whose  products  could  be  sold  in  a  market  adjusted, 
with  ideal  accuracy,  to  a  prearranged  demand.  Conceiva- 
bly, such  a  market  might  be  arranged  in  tlte  cibstract ;  it 
has  never  existed  as  a  concrete  fact. 

There  may  be  great  returns  in  wheat  and  corn  per  acre 


154  PROTECTION  VS.   FREE  TRADE. 

in  Iowa  and  Dakota,  but  whether  the  industry  is  relatively 
profitable  depends  on  the  market  value  of  these  products. 
'J'lie  free-trader  always  takes  it  for  granted  that  there  is  a 
normal,  absolute,  unvarying  rate  of  agricultural  profits 
under  freedom.  This  is  the  most  profitable  industry,  and 
all  others  are  "  unprofitable."  Up  to  a  certain  point  the 
production  of  a  certain  amount  of  agricultural  produce  is 
profitable.  After  that  point  is  reached  who  can  say  what 
is  tlie  most  advantageous  industry  ?  Is  the  ability  to  export 
it  the  test  ?  Then  we  are  to  keep  on  exporting  grain  so 
long  as  we  compete  successfully  with  them  in  the  world's 
market.  Suppose  the  world-market  is  supplied  without 
us ;  what  then  ?  Why,  then,  having  wasted  our  patrimony, 
the  freemen  of  America  are  forced  to  take  up  other  em- 
plojnnents  and  acquire  the  skill  which  will  enable  us  to 
organize  and  undergo  the  competition  which  the  violated 
laws  of  common  sense  and  nature  now  at  last  thnist  upon 
us.  Under  defensive  duties  we  are  enabled  to  undergo  it 
now  and  set  in  motion  our  industrial  machinery,  once  for 
all. 

The  economists  are  unceasingly  saying  that  there  is  a 
gain  in  every  exchange,  or  else  the  parties  to  it  would  not 
trade.  There  is  neither  historical  nor  logical  tnith  in  this. 
Life,  unfortunately,  is  filled  with  the  mistakes  of  men  in 
jjroduction  and  exchange,  and  the  miseries  which  have 
flowed  from  men  not  understanding  their  o^ti  true  in- 
terests. If  the  gain  which  a  man  reaps  by  exchanging  his 
estate  for  the  means  of  \acious  indulgences  is  summed  up 
in  "  the  gratification  of  his  desires,"  very  good.  The  sci- 
ence has  jurisdiction  over  him.  All  satisfactions  come 
from  the  proceeds  of  industry.  All  the  creations  of  in- 
dustry are  distributed  in  the  forms  of  wages,  rent,  and 
profits.  There  will  be  most  to  divide  when  the  most  is 
produced.     If  all  production  can  not  go  forward  in  the 


THE   ALTERXATIYES   OFFERED   US.  155 

most  adviintageous  work,  \re  take  up  the  next  most  pro- 
ductive. We  not  only  proceed  thus,  but  we  are  com- 
23elled  to  proceed  after  this  fashion.  Such  tirades  as  this 
are  an  inexact  description  of  the  facts :  Says  Prof.  Perry : 
"  TJie  original  trade  interfered  with  by  protective  taxes 
is  always  profitable ;  otherwise  it  would  not  be  carried 
on,  and  only  asks  to  be  let  alone  to  maintain  itself  as 
profitable."  The  original  trade  of  hauling  merchandise 
from  Philadelphia  to  Pittsburg  in  Conestoga  wagons  was 
natural  and  profitable.  It  was  the  best  we  could  do  in  the 
way  of  transportation.  Railroads  came  along,  and  it  ceased 
to  maintain  itself  as  profitable.  "Western  grain  was  labori- 
ously carted  from  Buffalo  to  New  York.  It  was  profitable, 
otherwise  the  business  would  not  have  been  carried  on. 
The  Erie  Canal  cuts  off,  in  whole  or  in  part,  tliis  natu- 
ral industry,  and,  by  restricting  carriage  by  horses  and 
wagons,  compels  the  traffic  to  be  carried  on  in  canal-boats. 
The  original  and  natural  industry  of  weaving  by  hand  was 
profitable ;  it  has  been  sadly  interfered  with  by  the  power- 
loom.  Does  Prof.  Perry  expect  society  to  be  petrified  in 
its  present  tracks  ?  ^ 

'  Prof.  R.  Ellis  Thompson  pertinently  asks :  "  Is  it  '  natural '  that  any  na- 
tion should  keep  its  farms  on  one  continent  and  its  workshops  on  another  ? 
Is  it  *  natural '  that  cotton,  on  its  way  from  the  grower  to  the  weaver,  should 
go  half-way  round  the  globe  and  back  ?  Is  it  'natural'  that  a  large  part  of 
the  race  should  be  employed  in  carrying  bulky  articles — raw  materials  and 
coarse  goods — from  some  countries  to  others  in  the  same  climate  and  of 
the  same  general  capacity  ?  Is  it  '  natural '  that  a  country  with  millions  of 
tons  of  iron  on  the  surface  of  her  soil,  and  square  miles  of  coal  not  far  be- 
low it,  should  send  thousands  of  miles  for  railroad-iron?"  ("Social  Sci- 
ence.") 

Frederic  Bastiat  recognizes  the  "  unnatural "  and  artificial  conditions 
under  which  European  exchanges  have  grown  up.  The  United  States  have 
no  occasion  to  extend  their  exchanges  into  such  a  system.  The  effort  it  will 
exact  from  us  ^ill  exceed  the  effort  which  it  saves.  He  says :  "  It  is  thus 
we  see  important  branches  of  industry  established  where  they  ought  not  to 


156  PROTECTIOX  VS.   FREE  TKADE. 

"  There  is  a  natural  market  for  tlie  things  a  nation  has 
to  sell  in  the  foreign  things  offered  against  them,"  ex- 
claims the  Professor.  AVhy  do  these  peoj^le  everlastingly 
look  to  the  foreign  market  I  The  domestic  market  can  be 
made  to  offer  the  same  commodities  against  our  export- 
ables. 

"JS^ow,  "svhen  this  j>rofitable  interchange  is  going  for- 
ward, protection  steps  in  and  cuts  off  in  part  or  in  whole 
this  natural  niarlcet^  and  compels  the  home  things  to  be 
sold  in  a  restricted  and  less  projitaMe  market,  by  putting 
heavy  taxes  on  the  introduction  of  the  things  seeking  these 
home  products  in  exchanges;  .  .  .  the  advocates  of  pro- 
tection do  not  claim  that  branches  of  business  which  would 
otherwise  be  profitable  and  seK-supporting  should  be  pro- 
tected, but  only  the  weak  and  less  profitable  kinds ;  let  it 
be  noted  that  the  '  protected '  branches  of  manufacture  are, 
by  supposition"  (^)  "and  confession"  (!),  '-'' unprofitaMe^ 
otherwise  it  would  be  idle  to  try  to  persuade  the  people  to 
be  taxed  to  keep  them  along ;  and  so,  to  bolster  up  these, 
protective  taxes  virtually  destroy  other  branches  of  mdus- 
try,  which  only  ask  that  their  natural  tnarket  shall  be  let 
alone,  in  order  to  maintain  an  independent  and  profitable 
existence."  ^ 

be.  France  makes  sugar."  (He  did  not  anticipate,  when  he  wrote  in  1850, 
the  triumph  of  protection  which  the  sugar  interests  in  France  would  illustrate 
in  1884.)  "England  spins  cotton  brought  from  the  plains  of  India.  Centu- 
ries of  war,  torrents  of  blood,  the  dissipation  of  vast  treasures,  have  brought 
about  those  results,  and  the  effort  has  been  to  substitute  in  Europe  sickly 
and  precarious  for  sound  and  healthy  enterprises,  and  to  open  the  door  to 
commercial  crises,  to  stoppages,  to  instability,  and  finally  to  pauperism." 

This  is  the  "clash  of  chaotic  cupidities"  amid  which  free  trade  invites 
America  to  cast  her  fortunes.  The  central  trouble  with  the  world  is  that  it 
saems  to  have  grown  up  on  the  political  and  not  on  the  economic  movements 
of  the  race. 

^  Prof.  Sumner  states  a  similar  scries  of  propositions  with  his  usual  crisp- 


THE   ALTERJ^ATIVES   OFFERED    US.  I57 

One  can  scarcely  deal  jDatiently  with  sucli  a  bundle  of 
assumptions  and  fallacies.  This  natural  market  is  con- 
fessedly limited,  and  is  not  natural  to  us.  Prolitable  inter- 
change can  only  go  forward  so  long  as  our  production  is 
kept  within  its  limits — if  we  ingeniously  hit  the  mark,  very 
well — but  the  overproduction  sets  us  back  to  other  indus- 
tiies ;  and  it  has  been  the  part  of  wisdom  to  provide  these 
other  industries  while  we  are  rich  enough  to  average  our 
efficiency.  A  farmer  may  begin  operations  by  cultivating 
his  most  fertile  and  prolitable  fields,  but  if  his  family  in- 
creased indefinitely,  he  would  extend  his  cultivation  over 
more  remote  and  possibly  less  productive  domains.  His 
average  results  might  be  proportionately  less  for  a  given 
expenditure  of  effort,  but  it  is  the  best  he  can  do,  and  his 
absolute  results  are  increased.^     If   no   children  came  to 

ness  and  dograatism.  Like  his  brother  professor,  he  assumes  the  existence 
of  an  illimitable  foreign  market  for  the  products  of  the  group  of  most  advan- 
tageous industries :  "  If  an  industry  does  not  pay,  it  is  an  industrial  abomina- 
tion. It  is  wasting  and  destroying.  The  larger  it  is,  the  more  mischief  it 
does.  The  protected  manufacturer  is  forced  to  allege,  when  he  asks  for  pro- 
tection, that  his  business  would  not  pay  without  it."  (It  would  not  "  pay  " 
1dm,  the  manufacturer,  without  protection,  that  is  certain.  The  real  prac- 
tical, common-sense  question  is,  Will  it  pay  the  society  of  which  he  is  a  mem- 
ber, in  the  long  run,  if,  once  for  all,  it  organizes  the  new  industry  at  a  pres- 
ent extra  cost  ?)  "  He  proposes  to  waste  capital.  If  he  should  waste  his  own 
wealth,  he  would  not  go  on  long.  He,  therefore,  asks  the  legislature  to  give 
him  power  to  lay  taxes  on  bis  fellow  citizens,  to  collect  from  them  the  capital 
which  he  intends  to  loaatc,  and  good  wages  for  himself  while  he  is  carrying 
on  that  business  besides.  This  is  what  is  called  '  developing  our  industries,' 
and  the  operation  of  the  law  is  such  that  the  waste  and  destruction  can  go 
on  indefinitely.  Either  an  industry  can  pay  under  freedom,  in  which  case  it 
does  not  need  protection,  or  else  it  would  not  pay  under  freedom,  in  which 
case  it  is  wasting  the  wealth  of  the  nation  as  long  as  it  goes  on." 

'  The  Pennsylvania  Railroad,  with  its  main  line  and  branches,  is  a  com- 
plicated organism.  Its  main  line  has  a  great  earning  capacity.  Many  of  its 
branches  are  run,  possibly,  at  a  loss  as  branches.  The  main  line,  operated 
alone,  shows  the  highest  efficiency — is  the  most  profitable  industry.  It  can 
only  be  worked,  including  its  branches,  at  a  certain  average  efficiency,  or,  if 


153  PROTECTION  VS.   FREE  TRADE. 

Mm,  he  could  keep  possession  of  his  original  field,  and 
maintain  his  original  advantage.  The  people  of  the  United 
States  have  simply  acted  on  his  maxims.  Immigrants 
and  natural  increase  of  population  have  driven  them  to 
occupy  industries,  possibly  less  profitable,  but  far  from 
unprofitable.  They  can  only  escape  the  unprofitable  con- 
sequences of  overproduction,  for  a  limited  foreign  market, 
by  forbidding  immigration  or  driving  labor  to  other  coun- 
tries. 

The  industries  which  pay  "under  freedom"  have  a 
relative  superiority  so  long  as  their  products  maintain  their 
present  exchangeable  value  in  the  foreign  market.  Rigid- 
ly maintained  within  the  limits  of  that  market,  they  pay. 
Finding  the  labor  and  capital  of  the  country  in  excess  of 
the  requirements  of  such  industries,  the  legislature,  acting 
for  the  whole  people,  provides  that  the  people  may  engage 
in  the  next  most  profitable  industry.  Unless  employed, 
the  capital  and  labor  must  and  ought  to  leave  the  country. 
The  "  protected  manufacturer  "  asks  nothing  of  the  people. 
All-of-us,  the  State,  simply  determine  to  enter  upon  all 
these  industries  indispensable  to  our  supply  of  needed 
commodities.  When  organized  they  pay — possibly  pay 
less  than  agriculture  under  the  ideal  presuppositions  Avliich 
have  never  been  realized  since  the  Government  was  organ- 
ized. There  is  no  waste  and  destruction,  but  the  whole 
outcome  is  pure  gain.     The  product  would  not  exist  else, 

you  please,  reduced  7-alc  of  average  earnings.  And  yet  it  is  manifest  that 
the  joint  effect  of  the  main  line  and  branches  is  not  a  losing  one,  and  is  more 
profitable — the  earnings  are  absolutely  larger — than  if  the  main  line  alone 
were  operated  and  the  branches  were  idle.  Yet,  in  a  certain  sense,  the  main 
line  is  taxed  by  the  branches.  Treated  as  a  whole,  there  is  no  tax  in  the 
case — no  "  waste." 

What  the  economists  call  the  unprofitable  industries  in  this  country  are 
"the  branches"  which  Nature  herself  has  built  for  us,  and  which  the  human 
nature  with  which  God  has  endowed  us,  qualifies  and  urges  us  to  operate. 


TEE   ALTERNATIVES   OFFERED   US.  159 

for  the  men  and  the  money  could  not  be  employed  in 
America  on  the  most  advantageous  industry  itself  without 
causing  that  industry  to  cease  to  "pay  under  freedom." 
"We  come  hack  again  to  the  eternal  fact  of  the  incapacity 
of  the  foreign  market  to  absorb  the  commodities  which 
the  international  division  of  labor  has  assigned  to  our  pro- 
ductive energies.  The  nation  has  simj)ly  extended  its 
operations  over  fields  which  yield  less  average  profits,  but 
the  operation  still  pays. 

AVe  have  so  often  come  upon  this  dilemma  of  the  free- 
trader in  finding  a  market  abroad  for  all  the  products  of 
our  most  advantageous  industries,  that  we  may  as  well  ex- 
amine the  case  somewhat  in  detail. 

For  the  fiscal  year  ending  June  30,  1883,  the  total 
exports  from  the  United  States  were,  in  round  numbers, 
$804,000,000,^ 

'  Agriculture,  11  per  cent  of  the  whole $019,269,449 

Manufactures,  ir)'91  per  cent  of  the  whole 111,890,001 

Mining  industry  and  oils,  6-40  per  cent  of  the  whole..        51,444,857 

Forestry,  1-24  per  cent  of  the  whole 9,976,143 

Fisheries,  '78  per  cent  of  the  whole 6,276,375 

All  others,  -67  per  cent  of  the  whole 5,306,807 

Agricultural  exports  amounted  to  77  per  cent  of  our  whole  exports,  or  to 
$619,269,449,  made  up  as  to  its  principal  items  as  follows: 

Cotton $247,328,721 

Bread  and  brcadstuffs 208,040,850 

Provisions 107,388,287 

Tobacco 22,095,229 

Animals  living 10,789,268 

Total $595,642,355 

or  96  per  cent  in  these  five  items. 

The  exports  of  manufactured  products  were  S111>890,C01. 
In  detail  they  were  made  up  of : 

Manufactures  of  wood $26,793,708 

Iron  and  steel 19,165,321 

Cotton 12,951,145 

Leather 7,928,662 


100  PKOTECTIOX    VS.  FEEE   TRADE. 

The  imports  were  8723,180,914.^ 

The  tables  subjoined  show  the  course  of  trade,  aud  the 
trade  balances,  between  the  United  States  and  each  of  the 


Turpentine $4,366,229 

Agricultural  impleracnls 3,883,919 

Drugs,  chemicals 3,306,195 

Sugar  and  molasses 3,266,581 

Sewing-machines 3,061,639 

These  nine  items  coustitute  about  75  per  cent  of  our  exports  of  manu- 
factures.    The  remaining  items  embrace  a  little  of  almost  everything. 
'  The  main  items  were : 

Sugar  and  molasses $90,326,395 

Wool,  raw  and  manufactured 55,224,283 

Silk,  raw  and  manufactured 50,807,616 

Chemicals,  etc 43,126,285 

Coffee 42,050,513 

Iron  and  steel 40,796,007 

Cotton 37,654,221 

Ilides  and  skins 27,640,030 

Tin 23,917,837 

Flax 19,737,542 

Fruits 19,313,041 

Tea 17,302,849 

India-rubber 15,844,802 

Jute,  etc 12,646,513 

Breadstuffs 15,830,605 

Wood 14,857,578 

Leather 13,104,415 

Tobacco 11,771,596 

Trovisions 10,653,273 

Earthen,  stone,  and  china 8,620,527 

Fancy  goods,  perfumery,  etc ....        8,358,471 

Furs 7,959,759 

Glassware 7,762,543 

Precious  stones 7,692,385 

Paper  materials 5,329,876 

Hemp 6,118,508 

The  remainder  of  the  list  includes  a  great  variety  of  things — books,  pict- 
ures, musical  instruments,  and  the  like — no  one  item  of  which  amounts  to 
one  half  of  one  per  cent  of  the  total  imports. 


THE   ALTERNATIVES   OFFERED   US. 


161 


other  countries,  taken  from  the  Bureau  of  Statistics  for  the 
year  ending  June  30,  18S3.  Any  other  recent  year  would 
show  about  the  same  state  of  trade : 


Value  of  the  Imports  of  MERcnAXDiSE  from,  and  of  the 
Exports  of  Merchandise  to,  those  countries  in  our  com- 
merce with  which  the  value  of  Exports  exceeded  the 
value  of  Imports  duriiig  the  year  ended  June  SO,  1883. 


COUNTRIES. 


IjGreat  Britain  and  Ireland. . . 

2  Russia 

S 
4 
5 
6 
7 


in  Aus- 


Spain 

Germany 

Mexico 

Netherlands 

British    possessions 

tralasia  

8  Belgium 

9  Portugal 

10  Denmark 

irChili 

12  Hong-Kong 

13  British  North  American  pos- 

sessions  

14  United  States  of  Colombia. . . 

15  Sweden  and  Norway 

16  Gibraltar 

17|British  possessions  in  Africa 

■      and  adjacent  islands 

18  .Azores,    Madeira,   and    Cape 
I     Verd  Islands 

19  Miquelon,    Langley,    and    St. 
I     Pierre  Islands 

20  Danish  "West  Indies 

21  Hayti 

22  Liberia 

23  French  Guiana 

24  Portuguese  possessions  in  Af- 
rica and  adjacent  islands. . 

Other  countries,  the  exports 
to  which  exceeded  the  im- 
ports   


Imports  of 
merchandise 

into  the 
United  States. 


§188,622,619 
2,599,995 
7,794,345 

57,o77,728 
8,177,123 

12,253,733 

4,021,395 
23,161,200 

1,093,476 
302,886 
435,584 

1,918,894 

44,740,876 

5,171,455 

1,831,171 

4,573 

1,840,020 

70,689 

17,370 

384,003 

2,971,515 

71,888 

18,437 

'  2,665 


290,200 


Exports  of 
doiiit'Stic  and    |       Exports  in 
foreign  merchan-j    excess  of  iai- 
dise  from  the  ports. 

United  States. 


Total $365,173,846  $682,457,799,  $317,283,953 


$425,424,174 
19,141,751 
16,931,287 
66,169,929 
16,587,620 
18,919,583 

9,795,656 
27,778,975 
5,485,037 
4,508,876 
2,860,496 
3,777,759 

46,580,253 

6,868,971 

2,824,548 

627,816 

2,438,069 

631,089 

451,887 
702,126 
3,223,101 
182,010 
102,084 

6,012 


439,690 


^236,801,555 
16,541,756 
9,136,942 
8,792,201 
8,410,497 
6,665,850 

5,774,261 
4,617,775 
4,391,561 
4,205,990 
2,424,912 
1,858,865 

1,839,377 

1,697,516 

993,377 

623,243 

598,049 

560,400 

434,511 
318,123 
251,586 
110,122 
83,647 


2,347 


149,490 


162 


PROTECTION    VS.   FREE   TRADE. 


Value  of  the  Impokts  of  Merchandise  from,  and  of  the 
Exports  of  Merchandise  to,  those  countries  in  our  com- 
merce ivith  ivhich  the  value  of  Imports  exceeded  the 
value  of  Exports  during  the  year  ended  June  30,  1883. 


COUNTfilES. 


Cuba 

France  

Brazil 

{ British  East  Indies 

China 

Japan  

Spanish  possessions,  other 
than  Cuba  and  Porto  Rico. 

Hawaiian  Islands 

British  Guiana 

Venezuela 

Porto  Rico 

Central  American  states  , . . . 

Argentine  Republic 

Uruguay  

Peru 

Italy 

Austria 

Greece 

French  West  Indies 

Turkey 

Dutch  West  Indies 

Dutch  East  Indies 

British  West  Indies 

San  Domingo 

French  possessions  in  Africa 
and  adjacent  islands 

Greenland,  Iceland,  and  the 
Faroe  Islands 

British  Honduras 

Dutch  Guiana 

All  other  countries,  the  im- 
ports from  which  exceeded 
the  exports 

Total 


Imports  of 
merchandise 

into  the 
United  States. 


g65,544,.534 
97,989,164 
44,488,459 
19,457,800 
20,141,331 
15,098,890 

10,617,503 
8,238,461 
5,940,429 
5,901,724 
5,477,493 
5,121,315 
6,192,111 
3,980,110 
2,526,918 

11,909,658 
2,984,923 
1,231,580 
2.895,857 
2,108,967 
882,058 
2,645,917 
8,736,112 
1,417,519 

388,483 

97,400 
531,839 
473,043 


4,911,410 


$358,007,068 


Exports  of 

domestic  and 

foreign  merclian- 

dise  Ironi  the 

United  States. 


$15,103,703 
58,682,223 
9,252,094 
2,185,804 
4,080,322 
8,376,434 

324,474 
3,776,005 
2,035,156 
2,403,705 
2,164,708 
2,003,467 
3,543,196 
1,452,818 

493,894 

10,313,558 

1,779,904 

91,017 

1,813,555 

1,309,703 

589,612 
2,407,131 
8,502,163 
1,201,874 

257,898 


504,417 
451,349 


1,221,369 


$141,381,603 


Imports  in 
excess  of  ex- 
ports. 


$50,440,831 
39,306,941 
35,236,365 
17,281,996 
16.061,009 
11,722,456 

10,293,089 

4,402,396 

3,911,273 

3,498,019 

8,312,785 

8,117,848 

2,648,915 

2,627,292 

2,033,024 

1,596,100 

1,205,019 

1,140,563 

1,082,302 

799,264 

292.446 

238,786 

233,959 

215,645 

130,585 

97,400 
27,422 
21,694 


3,690,041 


$216,625,465 


It  thus  appears  that  of  our  exports,  agriculture  furnished 
77  per  cent,  manufactures  13-91  per  cent,  and  mining  and 
mineral  oils  G40  per  cent. 


THE   ALTERNATIVES   OFFERED   US.  163 

Of  food-products,  we  sent  abroad  values  to  the  amount 
of  $325,000,000,  less  than  10  per  cent  of  our  products. 
This  was  consumed  in  Great  Britain  and  the  people  living 
along  the  western  water-front  of  Europe.  England  is  com- 
pelled to  buy  about  one  half  of  the  food  of  her  population 
abroad,  but  America  is  by  no  means  the  only  country  in 
the  world  which  raises  a  surplus  accessible  to  her.  France 
can  feed  herself,  and  Germany.  The  extension  of  railroads 
through  Europe  into  the  food -raising  areas  of  Poland, 
Hungary,  and  Russia,  has  brought  down  all  prices  in  Mark 
Lane.  Asia  has  now  fairly  brought  her  agricultural  prod- 
ucts into  competition  with  ours. 

On  inspection  of  the  tables  given  above,  we  find  that  the 
balance  of  trade  against  us  in  Cuba,  France,  Brazil,  China, 
Japan,  Spanish  possessions,  and  Yenezuela,  is  nearly  two 
hundred  millions.  We  sell  no  food  to  them.  For  our 
sugar,  French  wines  and  articles  of  luxuiy  and  elegance, 
tea,  tropical  fruits,  raw  hides,  and  a  large  list  of  commodi- 
ties which  we  can  not  mention,  we  pay  in  cash  or  its  repre- 
sentative, and  not  in  exports  direct.  The  balance  of  trade 
is  in  our  favor  in  the  cases  of  Great  Britain,  Bussia,  Spain, 
Germany,  Netherlands,  Belgium,  Portugal,  and  Denmark. 
From  them  we  get  the  bankers'  bills  of  exchanges  which 
settle  the  adverse  balance  elsewhere.  What  is  left  we  can 
take  out  in  manufactured  goods  from  England,  Germany, 
and  France.  With  England  alone  there  is  a  balance  of 
trade  in  our  favor  of  $236,000,000.  But  that  does  not 
mean  that  we  can  take  pay  in  British  goods.  We  sent 
there  $425,000,000  worth  of  exports,  and  took  from  there 
$188,000,000  in  merchandise.  The  difference  was  sent 
in  bills  of  exchange  for  our  account  to  pay  our  debts  to 
France,  Cuba,  Brazil,  China,  and  Japan.  We  paid  Eng- 
land, Germany,  and  France,  for  manufactured  goods  made 
of  wool,  silk,  iron  and  steel,  and  cotton  alone,  $185,000,000. 


164  PROTECTION  VS.   FREE  TRADE. 

These  goods  could  have  been  made  at  home,  and  it  is  all 
that  our  surplus  food,  which  the  foreign  market  would  take, 
enabled  lis  to  buy.  AVe  should  then  have  been  compelled 
by  free  trade  to  have  gone  without  all  these  commodities 
which  the  protection  taiiff  enabled  the  home  industries  to 
produce  here.  Besides  the  §000,000,000  which  the  Ameri- 
can farmer  sold  abroad,  he  sold  more  than  $1,500,000,000 
at  home.  We  bought  abroad,  in  round  numbers,  $723,000,- 
000,  for  about  half  of  which  we  paid  in  food  and  provis- 
ions. Let  us  now  see  how  exchange  values  on  exports  and 
imports  will  be  affected  according  to  some  principles  we 
find  laid  down  in  Adam  Smith's  ''  Wealth  of  J^ations." 
We  come  to  the  third  and  fourth  propositions  in  the  sec- 
ond alternative  set  we  are  considering. 


CHAPTER  YIII. 

ADAM    SMITH SOME   FACTS    IN    OUK    HISTOEY. 

AccoKDiNGLY,  let  US  invite  the  free-trader,  supposing 
him  to  be  honest  and  fair-minded,  to  propose  to  Adam 
Smith  the  foregoing  data  to  determine  the  relative  ex- 
change values  in  a  foreign  market  of  raw  produce  in  a 
state  of  overproduction,  and  certain  manufactured  commodi- 
ties in  a  state  of  underproduction.  America,  by  under- 
selling all  other  countries,  has  succeeded  in  getting  rid 
of  $700,000,000  worth  of  her  products,  of  which  about 
half  were  food  and  provisions.  For  this  she  got  in  ex- 
change some  $350,000,000  in  articles  of  the  uses,  decencies, 
elegancies,  and  luxuries  of  life  becoming  a  highly  civilized 
society — tropical  fruits  and  products  unfitted  to  her  climate 
and  the  capacities  of  her  labor;  besides,  she  took  in  ex- 
change some  $350,000,000  of  manufactured  goods  which 
under  existing  conditions  she  does  not  undertake  to  pro- 
duce. Her  domestic  manufactures  produce  some  $8,000,- 
000,000  of  value  from  their  industries  annually,  of  which 
probably  $2,500,000,000  come  from  competing  industries 
which  commenced  to  exist  mainly  by  virtue  of  protective 
laws,  and  industries  related  to  and  dependent  on  them. 
They  employ  one  quarter  of  the  population  of  the  land. 

"  It  is  proposed,  Mr.  Smith,  that,  inasmuch  as  at  pres- 
ent we  get  fair  returns  from  labor  in  fertile  fields,  the  sur- 
plus produce  of  which  has  a  home  market  for  $1,500,000,- 
000  worth  annually,  and  a  present  foreign  market  for  an 


166  PROTECTION  VS.   FREE  TRADE. 

additional  $700,000,000,  we  all  take  to  tliis  most  advan- 
tageous industry  and  abandon  the  protected  industries. 
"We  are  all  going  into  the  industry  wliich  '  pays  under  free- 
dom.' AVe  shall  then  want  to  buy  in  foreign  markets  the 
8700,000,000  as  now,  and  besides  the  $2,500,000,000  worth 
of  the  products  which  our  '  distorted  industries  '  now  fur- 
nish us  ;  besides,  our  surplus  productions  in  agriculture  will 
then  be  swelled  by  the  whole  amount  which  one  fourth  of 
our  population,  released  from  protected  industries,  can  add 
to  them.  On  the  whole,  we  shall  need  to  find  a  market 
abroad  for  our  surplus  products  to  the  amount  of  quite  two 
thousand  five  hundred  million  dollars. 

" '  Why  are  we  compelled  to  carry  our  bulky  produce 
nearly  three  thousand  miles  ? '  Because  the  workshops  of 
the  world  are  there,  and  men  work  cheaper  and  their 
wages  are  low. 

"  No  ;  there  are  no  disadvantages  against  our  labor  ex- 
cept the  necessity  of  paying  our  workmen  higher  wages. 
They  are  freemen,  accustomed  to  comfort,  educate  their 
children,  and  have  a  general  purjoose  to  get  on  in  the  world. 
They  are  great  producers,  and  are  also  great  consumers. 
There  is  a  very  energetic  state  of  things,  indeed,  among 
them.  And  these  great  wages  come  from  the  commodities 
they  make. 

"  No ;  there  is  no  country  in  which  the  soil,  climate, 
and  natural  productions  are  more  varied.  No  country  has 
any  peculiar  advantages  over  us — no  country,  at  least,  in- 
habited by  civilized  man.  No  country  exceeds  us  in  the 
amount  of  capital  it  possesses,  nor  in  the  skill  and  willing- 
ness to  work.  Indeed,  capital  is  so  plentiful,  and  labor  so 
abundant,  that  a  few  years  ago  in  a  sudden  emergency 
more  than  three  million  men  went  into  the  industry  of  a 
civil  war.  They  invested  more  than  six  thousand  millions 
of  dollars  in  the  business.     Both  the  men  and  the  money 


ADAM  SMITH— SOME  FACTS  IN  OUR  HISTORY.  167 

■were  promptly  forthcoming.  Of  course,  wlien  you  ^vTote 
the  '  Wealth  of  Xations '  you  seemed  to  think  '  industry 
■v\'as  limited  by  capital.'  In  America  what  is  wanted  is  not 
capital,  but  a  field  of  employment.  The  world  has  gained 
in  the  last  hundred  years,  and  you  have  no  idea  how  things 
have  gone  on, 

"  Yes,  I  recall  what  you  wrote :  '  The  natural  advan- 
tages which  one  country  has  over  another  in  producing 
particular  commodities  are  sometimes  so  great  that  it  is  ac- 
knowledged by  all  the  world  to  be  in  vain  to  struggle  with 
them.  By  means  of  glasses,  hot-beds,  and  hot  walls,  very 
good  grapes  can  be  raised  in  Scotland,  and  very  good  wine, 
too,  can  be  made  of  them  at  about  thirty  times  the  ex- 
pense for  which  at  least  equally  good  can  be  brought  from 
foreign  countries.  Would  it  be  a  reasonable  law  to  pro- 
hibit the  importation  of  all  foreign  wines  merely  to  encour- 
age the  making  of  claret  and  burgundy  in  Scotland  ? ' 

"  But  I  could  not  honestly  say  that  the  protected  indus- 
tries in  America  answer  at  all  to  that  description.  They  are 
not  '  such  employments.'  The  climate  of  Scotland  is  a  per- 
manent obstacle  to  grape-raising.  I  could  not  say  that  the 
production  of  a  ton  of  iron  or  a  ja.rd  of  cloth  requires  any 
more  caj)ital  and  labor  than  it  does  in  England.  It  costs 
no  more  to  overcome  the  obstacles  which  nature  presents 
in  America  than  it  does  in  Great  Britain.  Its  increased 
cost  is  principally  in  the  wages  of  the  laborer.  The  pro- 
tectionist seems  to  hope  that  that  disadvantage  wiU  be  per- 
manent. I  recall  that  you  have  said  that  '  labor  is  the  first 
price — the  original  purchase-money  paid  for  all  things.' 

"  And  so  you  now  think  that  it  is  no  economic  disad- 
vantage to  the  nation,  as  a  whole,  that  its  labor  is  better 
paid  ?  That,  if  the  industry  is  natural  to  a  country,  the 
increase  in  wages  costs  the  nation  nothing?      That,  be- 


108  PKOTECTION  VS.   FREE  TRADE. 

cause  the  laborer  can  afford  increased  consumption,  and 
does  afford  it,  the  consumer  of  his  products  gets  it  all  back 
again,  and  that  in  the  final  division  all  labor  gets  distrib- 
uted into  rent,  wages,  and  profits,  and  universal  activity  is 
the  result?  That  industrial  competition  equahzes  remu- 
neration to  sacrifice,  and  that  the  country  is  the  richer  by 
the  new  thing  produced  ? 

"  Ah !  then  I  see  how,  the  natural  facilities  being  the 
same  and  the  skill  the  same,  it  modifies  what  you  wrote  in 
these  words :  '  Whether  the  advantages  which  one  country 
has  over  another  be  natural  or  acquired  is  in  this  respect  of 
no  consequence.  As  long  as  the  one  country  has  those  ad- 
vantages and  the  other  wants  them,  it  will  be  always  more 
advantageous  for  the  latter  rather  to  buy  of  the  former  than 
to  make.  It  is  an  acquired  advantage  only  which  one  ar- 
tificer has  over  his  neighbor  w^ho  exercises  another  trade, 
and  yet  they  both  find  it  more  advantageous  to  buy  of  one 
another  than  to  make  what  does  not  belong  to  their  particu- 
lar trades.'  You  mean,  if  the  Americans  are  all-sided  and 
have  brought  the  division  of  labor  to  perfection,  that  the 
acquired  advantage  stands  on  equally  high  and  strong 
grounds  with  natural  advantage,  and  that  it  was  worth 
while  to  acquire  the  new  advantage.  I  do  now  recollect 
that  John  Rae  showed  the  respects  in  which  an  individual 
and  a  nation  became  opulent  by  means  of  entirely  different 
orders  of  procedure.  I  see  clearly  why  your  illustration 
lacks  application  to  a  state  of  things  you  had  never  con- 
ceived. There  had  been  no  parallel  case  in  your  experi- 
ence. 

"Ko;  there  is  no  scarcity  of  labor.  There  must  be 
nearly  seven  hundred  thousand  laboring-men  added  each 
year  to  the -population  of  the  United  States  by  natural  in- 
crease and  immigration.  Such  a  fact,  which  in  its  magni- 
tude could  not  have  been  in  your  cognizance,  completes 


ADAM  SMITH— SOME  FACTS  IN  OUR  HISTORY.  169 

tlie  equipment  of  America  in  its  land,  its  capital,  and  its 
labor,  the  great  trinity  from  wliicb  alone  can  come  national 
opulence.  And  yet,  in  your  inductive  reasoning,  you  had 
betrayed  your  true  insight  into  the  divine  efficacy  of  their 
unity.  '  Nations,'  you  said,  '  can  only  advance  in  greatness 
and  prosperity  as  the  numbers  of  their  inhabitants  increase. 
"Whatever  the  natural  fertility  of  the  soil,  however  genial 
the  climate,  and  however  well  fitted  the  whole  country 
may  be  for  the  practice  of  every  species  of  industry,  yet  if 
it  be  deficient  in  population,  these  natural  riches  can  never 
be  elaborated,  and  it  must  hold  a  poor  and  inconsiderable 
rank  in  the  scale  of  nations.'  (Adam  Smith  here  was 
very  near  the  outside  limits  of  his  science,  and  gave  sure 
sign  of  '  impending  fallacy  and  confusion '  as  he  approached 
the  confines  of  social  science,  and  hinted  at  moral  consider- 
ations.) '  A  confined  and  comparatively  barren  territory, 
filled  with  a  numerous  industrious  population,  exceeds  the 
most  fertile  and  extensive  country,  scantily  peopled.  It  is 
the  people  that  make  the  state — its  real  riches  he  in  its  in- 
habitants.' "  (Is  it  possible  that  Adam  Smith  is  going  to 
solve  an  eco7io)7iic  problem  by  introducing  moral  and  polit- 
ical elements  ?) 

Adam  Smith,  loquitur :  "No,  my  free-trade  friend,  you. 
misconceive  the  philosopliy  of  the  '  "Wealth  of  Nations.'  I 
have  treated  a  nation  as  a  society  in  possession  of  certain 
instruments  of  production.  They  are  engaged  in  procur- 
ing for  themselves  the  necessaries,  conveniences,  and  amuse- 
ments of  life.  It  is  true  that,  when  I  wrote,  this  flame  of 
industrial  conquest  had  not  lighted  np  the  world  and  made 
life  a  scene  of  industrial  warfare.  Men  had  not  wrested 
fire  and  steam  and  electricity  to  human  uses. 

"  They  were  still  tugging  away  with  human  muscles. 
I  had  pointed  many  paragraphs  of  my  book  against  the 
vileness  and  injustice  of  the  English  colonial  policy,  and  its 


170  PROTECTION    VS.  FREE  TRADE. 

evident  purpose  to  enslave  tlie  industrial  impulses  of  her 
colonists.  I  said  :  '  To  prohibit  a  great  people,  however, 
from  making  all  they  can  of  every  part  of  their  produce, 
or  from  employing  their  stock  and  industry  in  a  way  that 
they  judge  most  advantageous  to  themselves,  is  a  manifest 
violation  of  the  most  sacred  rights  of  mankind.'  I  did 
this  because  its  effect  was  to  suppress  the  industrial  free- 
dom of  the  colonies  and  to  hold  them  in  commercial  slav- 
ery to  the  ambitious  designs  of  English  statesmen  and  Eng- 
lish manuf actm'ers ;  yet  it  seems  that  free  foreign  trade  now 
works  precisely  the  same  results.  I  taught  that  all  systems, 
either  of  preference  or  restraint,  being  taken  completely 
away,  '  the  obvious  and  simple  system  of  natural  liberty 
establishes  itself  of  its  own  accord.'  And  I  discharged  the 
sovereign  from  '  the  duty  of  superintending  the  industry 
of  private  people,  and  of  directing  it  toward  the  employ- 
ments most  suitable  to  the  interests  of  society.'  When  I 
wrote,  the  steam-engine  was  not  perfected,  and  the  spin- 
ning-jenny and  power-loom  had  not  been  invented.  Iron 
was  brought  to  England  from  America.  The  two  or  three 
millions  of  people  who  occupied  America  were  strung  along 
the  coast,  and  had  scarcely  got  west  of  the  Hudson,  and 
had  not  reached  the  Ohio  and  the  lakes.  Population  was 
sparse,  and  their  few  and  simple  wants  were  supplied  by 
household  industries  and  a  little  commerce  with  England 
and  the  West  Indies.  As  things  were  then,  they  were 
simply  productive  agents  thrown  to  the  periphery  of  the 
industrial  wheel  by  force  of  the  central  agencies  at  work  in 
England  and  Europe.  They  were  subordinate  members  of 
the  industrial  structure,  and  performed  subordinate  func- 
tions. They  had  even  then  no  market  for  their  sur|)lus. 
Their  agriculture  of  itself,  at  that  time,  produced  them 
poverty,  not  wealth  ;  nideness,  not  comfort ;  scarcity,  not 
plenty,  as  you  now  seem  to  understand  these  things.     The 


ADAM   SMITH— SOME   FACTS   IN   OUR  HISTORY.  171 

KevolutioD,  which  they  began  the  same  year  my  '  Wealth  of 
l^ations '  was  published,  made  them  a  new  political  center. 
It  was  the  genesis  of  a  new  nation.  The  aspirations  of  man- 
kind were  kindled  afresh.  There  was  a  movement  of  ail 
people  and  all  tongues  to  the  shores  of  the  Western  empire. 
Freedom  was  the  word,  and  civil  liberty  and  religious 
emancipation  were  the  watchwords.  Men  sought  Columbia 
for  homes,  the  chances  for  plenty  and  freedom.  They 
went  under  domestic,  social,  political,  ethical,  national  mo- 
tives, as  well  as  a  regard  for  economical  results.  Once  set- 
tled under  their  own  roof -trees,  they  turned  to  the  practical 
affairs  of  life.  More  laborers  went  to  America  under  the 
impulses  of  the  great  uprising  of  humanity  which  urged 
them  than,  under  '  the  obvious  and  simple  system  of  natural 
liberty,'  could  retain  normal  and  profitable  relations  to 
European  commerce.  They  took  to  the  most  advantageous 
industries,  but  after  the  war  there  were  ruin,  bankruptcy, 
and  distress.  From  1783  to  1789  they  had  the  policy  of 
absolute  free  foreign  trade.  There  was  no  sale  for  the 
products  of  their  industry  in  the  foreign  market.  The  in- 
stinct of  liberty  had  distributed  these  men  in  America  in 
a  proportion  out  of  any  ratio  which  mere  considerations  of 
economic  prudence  would  have  inspired.  Too  many  had 
come.  Some  must  remain  idle,  return,  or  pursue  other  in- 
dustries. I  had  never  said,  in  the  '  Wealth  of  ISTations,' 
that  if  a  country  had  some  natural  and  highly  advantage- 
ous industry,  God  had  intended  that  no  more  people  should 
live  and  work  in  that  country  than  could  work  at  that  in- 
dustry. I  had  never  said  that  a  man  should  learn  a  trade, 
unless  he  could  sell  the  products  of  his  labor  in  that  trade. 
I  had  never  said  that,  if  men  flocked  to  a  new  country 
under  the  stimulus  of  the  highest  motives  possible  to  hu- 
man beings,  there  were  any  economic  doctrines  which  com- 
pelled them  to  be  idle  and  starve.     I  have  said  they  could 


172  PROTECTION  VS.   FREE  TRADE. 

always  produce  for  tlie  liome  market,  and  in  some  score  of 
places  in  mj  book  I  liave  insisted  on  the  superiority  of 
that  market.  For  instance,  '  Whatever,  then,  tends  to  dimin- 
ish in  any  country  the  number  of  artificers  and  manufact- 
urers, tends  to  diminish  the  home  market — the  most  im- 
portant of  all  markets  for  the  rude  produce  of  the  land.' 
More  specifically  I  have  said  these  words:  'Capital  em- 
ployed in  purchasing  in  one  part  of  a  country  in  order  to 
sell  in  another  part  the  produce  of  the  industries  of  that 
cou7itry,  generally  replaces,  by  such  operation,  tivo  distinct 
capitals  that  had  both  been  employed  in  its  agriculture  or 
manufactures,  and  thus  enables  them  to  continue  that  em- 
ployment. The  capital  used  in  buying  foreign  goods  for 
domestic  consumption,  when  the  purchase  is  made  by  the 
produce  of  domestic  industry,  replaces  also  two  distinct 
capitals,  but  one  of  them  only  supports  domestic  industry, 
the  other  sup>])ort8  foreign  industry,  and,  therefore,  foreign 
trade  will  give  but  one  half  the  encouragement  to  the  in- 
dustry or  productive  lahor  of  a  country  that  domestic  or 
internal  trade  does.' 

"  My  chapter,  '  Of  the  Xatui-al  and  Market  Price  of 
Commodities,'  teaches  what  the  natural  price  would  be 
when  the  component  parts  of  the  cost  are  taken  into  ac- 
count. There  is  no  market  price  in  a  market  where  there 
is  no  demand.  M.  Say  has  tried  to  prove  that  there  can 
be  no  general  glut;  but  a  glut  in  overproduction  of  par- 
ticular commodities  is  within  the  familiar  experience  of 
every  observer.  Agricultural  products  are  steadily  renewed 
from  year  to  year,  and  the  amount  of  food  each  person 
consumes  is  very  definitely  determined.  The  wants  of  a 
hungry  man  are  well  known,  and  may  be  quantitatively 
provided  for.  But  there  is  no  limit  to  many  forms  of 
human  wants,  such  as  clothing,  shelter,  luxuries,  indul- 
gences, artistic  longings — engendered  by  riches,  fashion, 


ADAM  SMITE-SOME  FACTS  IX  OUR  HISTORY.         173 

caprice.  The  food  a  given  market  takes  may  be  determi- 
nately  ascertained  ;  not  so  with  manufactured  commodities. 
If  the  people  in  America  overproduce  food  for  tlie  limited 
markets  which  depend  on  them,  they  pay  the  same  penalty, 
in  loss  of  market  values,  as  if  they  overproduced  gunpow- 
der or  iron — with  the  certainty  that  they  have  strong  com- 
petitors in  all  parts  of  the  world.  If  my  doctrine  of  natu- 
ral freedom  has  full  play  within  the  limits  of  the  thirty- 
eight  States  of  the  Western  Republic,  they  have  satisfied 
all  the  conditions  I  have  prescribed. 

"  If  your  industries  are  natural,  and  not  overweighted 
by  the  necessity  of  more  labor — sacrifice,  effort — for  a  given 
2^roduct  than  in  other  nations ;  if  your  pursuits  are  only 
those  authorized  by  the  nature  of  things,  they  are  legiti- 
mate pursuits  for  an  industrious,  skillful  people.  When 
there  is  no  difference  in  natural  and  acquired  advantages, 
the  price  of  labor — the  wages  of  a  day's  work — is  no  de- 
cisive test  of  the  productiveness  of  labor.  The  abundance 
of  commodities  is  the  test  of  that ;  money-prices  only  con- 
fuse the  matter  in  your  mind.  You  have  as  large  a  product 
under  a  high  rate  of  wages  as  under  a  low  rate.  If  all  your 
people  can  not  be  employed  in  the  industries  which  give 
the  highest  returns,  and  unless  you  find  a  market  which 
will  continue  to  take  them  on  correspondingly  high  ex- 
change values,  you  must  take  to  other  industries  and  con- 
sent to  certain  average  returns.  It  is,  at  last,  the  products 
which  you  want,  not  their  price.  If  you  can  not  expend 
your  highest  efficiency  and  receive  the  highest  returns,  you 
must  consent  to  exert  a  certain  average  efficiency,  and  be 
content  with  certain  average  returns. 

"  If  Scotland  could  acquire  the  sunny  skies  and  genial 
climate  of  France,  her  hills  would  be  covered  with  vines 
instead  of  heather,  and  to  acquire  that  advantage  it  would 
be  worth  paying  for,  even  if  it  took  a  great  expenditure. 


174  PROTECTION    VS.  FEEE  TRADE. 

'A  new  cliannel  might  be  opened  from  the  exhaustless 
river  of  human  power,  springing  from  the  mingled  sources 
of  nature  and  art,  so  that  a  plenteous  stream  would  flow  in 
the  community,  from  which  individuals  drawing  might 
largely  add  to  the  general  opulence.  But  some  means 
must  be  employed  to  open  it  up.  There  is  an  obstniction 
in  the  way  that  must  previously  be  overcome  ;  a  rock 
blocking  it  up  that  must  be  removed.  No  individual  will 
open  i\p  the  channel,  because,  were  he  to  do  so,  he  could 
derive  no  more  benefit  from  the  labor  than  others  who  had 
not  labored.  The  whole  society,  or  rather  the  legislator, 
the  power  acting  for  the  whole  society,  might  do  so,  and 
in  similar  cases  has  done  so ;  and,  to  judge  of  the  measure 
hy  the  events  consequent  on  it,  with  the  happiest  success.' 
The  Navigation  Act  was  a  famous  instance. 

"National  and  individual  capital  do  not  necessarily 
increase  in  the  same  manner.  At  least  my  words  in  the 
'  Wealth  of  Nations '  must  be  taken  with  the  qualifications 
wbich  suggest  themselves  if  you  read  carefully  and  closely 
— if  read  literally,  they  contain  an  ambiguity,  I  might  say 
a  fallacy,  which  was  not  in  my  mind,  but  which  the  facts 
in  America,  and  the  course  of  modern  commerce,  render 
quite  apparent. 

"  In  a  passage  habitually  quoted  I  said :  'It  is  the 
maxim  of  every  prudent  master  of  a  family  never  to  at- 
tempt to  make  at  home  what  it  will  cost  him  more  to  make 
than  to  buy.  The  tailor  does  not  attempt  to  make  his  own 
shoes,  but  buys  them  of  the  shoemaker.  The  shoemaker 
does  not  attempt  to  make  his  own  clothes,  hut  employs  a 
tailor.  The  farmer  attempts  to  make  neither  the  one  nor 
the  other,  but  employs  those  different  artificers.  All  of 
them  find  it  for  their  interest  to  employ  their  whole  indus- 
tnj  in  a  way  in  which  they  have  some  advantage  over  their 
neighbor,  and  to  purchase  with  a  part  of  its  produce,  or, 


ADAM  SMITH— SOME  FACTS   IN  OUR  HISTORY.  175 

what  is  the  same  thing,  with  the  price  of  a  part  of  it,  what- 
ever else  they  have  occasion  for.  What  is  prudence  in  the 
conduct  of  every  private  family  can  scarcely  be  folly  in 
that  of  a  great  kingdom.' 

"  JS^ow  a  tricky  logician  can  make  an  unfair  use  of  that 
passage.  You  will  observe  that  I  had  said  that  the  differ- 
ent artificers  iind  it  for  their  advantage  to  employ  their 
whole  industry  in  the  way  in  which  they  have  some  advan- 
tage. It  is  obvious  to  any  reasonable  thinker  that  he  could 
only  retain  his  advantage  on  the  condition  that  lie  could 
sell  the  v^hole  of  his  surplus  produce  and  get  '  the  price  of 
it.'  If  he  remained  idle  one  day  or  two  days  a  week  he 
would  lose  his  advantage,  or,  if  he  kept  at  work  and  made 
more  shoes,  or  clothes,  or  food  than  the  others  wanted,  he 
would  be  compelled  to  make  such  concessions  in  price  as 
would  be  fatal  to  his  advantages.  In  the  latter  case,  the  sur- 
plus for  which  there  was  no  demand  would  bring  no  price, 
and  he  would  lose  his  labor  and  trouble.  If  he  were  idle 
two  days  in  a  week  as  a  shoemaker^  he  could  do  something 
else,  and  what  he  produced  when  he  would  otherwise  have 
been  idle  costs  him  nothing.  So  far  as  it  has  exchangeable 
value  it  would  be  clear  gain  to  him  and  to  the  society  in 
which  he  lived. 

"  I  must  remind  you  again  in  this  connection  of  what  I 
said  in  my  chapter  of  the  '  Division  of  Labor ' :  '  The  di- 
vision of  labor  is  limited  by  the  extent  of  the  market. 
Before  any  man  or  any  set  of  men'  (the  people  of  the 
United  States,  for  instance)  '  can  in  common  prudence  de- 
vote themselves  to  any  particular  employment '  (the  raising 
of  raw  produce,  for  instance),  '  they  must  be  assured  that 
they  can  dispose  of  the  commodity  which  their  exertions 
in  the  prosecution  of  that  employment  will  produce.'  This 
proposition  is  just  as  applicable  to  the  international  division 
of  labor  and  the  world's  commerce  as  it  is  to  the  division 


176  PROTECTIOX    VS.  FREE  TRADE. 

of  labor  in  tbo  villaires.  A  nation  takes  the  same  risks  in 
undertaking  to  hold  its  superiority  in  j^rices  in  the  markets 
of  the  world,  even  in  an  advantageous  industry,  as  the  tailor 
or  the  blacksmith  who  produces  more  than  he  can  sell.  The 
folly  of  '  a  great  kingdom '  which  drives  ahead  without  any 
true  pei'sj)ective  of  the  wants  of  the  world's  commerce  is 
just  as  egregious  and  inexcusable  as  that  of  the  private 
family  which  makes  unsalable  things  for  the  towm  market. 
The  nation  and  the  family  may  make  the  commodity  at  a 
small  cost  of  labor,  but  it  can  not  have  the  price  of  it  on 
the  basis  of  superior  efficiency.  If  they  can  consume  it  at 
home  and  make  it  the  means  of  further  products  for  which 
there  is  a  market,  they  will  recover  their  superiority.  What 
happens  in  the  case  you  put  is  this :  international  commerce 
will  operate  as  a  substitute  for  competition,  and  free  trade 
reduces  your  efficiency  and  compels  you  to  divide  your  ad- 
vantages with  foreign  nations.  Protection  enables  your 
people  as  a  to  hole — the  nation — to  retain  them  all. 

"  I  thereupon  answer  your  question,  and  say  to  you 
that,  if  you  undertake  to  sell  $2,500,000,000  of  products  in 
a  market  which  requires  only  $700,000,000,  you  undertake 
an  impossibility.  If  the  trade  were  possible,  you  would 
lose  all  your  relative  superiority,  and  would  pay  the  cost  of 
transportation  both  ways — the  whole  expense  of  the  car- 
riage of  your  exports  and  of  your  imports  will  be  paid  by 
the  people  of  the  United  States.  The  whole  cost  of  get- 
ting to  a  market  to  which  you  are  forced  to  go  will  be 
borne  by  your  people.  But,  more  than  all,  you  will  starve 
in  the  midst  of  your  fertile  fields.  You  can  not  dispose 
of  the  commodities  which  your  exertions  have  produced. 

"  The  fonnula,  not  fully  worked  out  by  myself,  which 
Mr.  Mill  called  '  The  Equation  of  International  Demand,' 
is  the  law  of  your  case.  He  answered  it  in  these  words : 
'  The  produce  of  a  country  exchanges  for  the  produce  of 


ADAM   SMITH— SOME   FACTS   IN   OUR   HISTORY.  I77 

other  countries  at  such  vahies  as  are  required,  in  order  that 
the  whole  of  her  exports  may  exactly  pay  for  the  whole  of 
her  imports.'  But,  under  the  condition  of  the  case  you 
put  to  me,  a  large  portion  of  your  exports  go  for  necessi- 
ties which  you  can  not  raise,  the  products  of  non-compet- 
ing industries.  Tlie  portion  with  which  you  might  pur- 
chase manufactured  commodities  such  as  you  produce  in 
your  competing  industries,  '  protected '  industries  will  fur- 
nish only  a  small  part  of  your  aggregate  demand.  The 
foreign  market  neither  takes  nor  gives  according  to  your 
requirements.     You  must,  therefore,  make  them  at  home. 

"  Do  it  at  once,  and  stop  your  illogical  grumbling  about 
taxes  and  your  senseless  refinements  of  carrying  on  one  in- 
dustry at  the  cost  of  another.  These  are  the  only  conditions 
of  '  freedom '  left  open  to  you." 

The  entire  consistency  of  what  we  have  supposed  Adam 
Smith  to  have  said  can  be  maintained  from  the  discussion 
in  his  "Wealth  of  Nations."  It  is  equally  certain  that, 
in  more  than  one  passage,  John  Stuart  Mill  has  taken  the 
same  ground.  It  is  very  true  that  when  the  latter  contem- 
plates the  world  of  trade  from  Manchester  and  looks  upon 
the  necessity  England  is  under  to  procure  by  exchanges 
the  very  food  which  maintains  her  labor  and  the  raw  mate- 
rials upon  which  they  work,  he  wants  unrestricted  commerce 
with  countries  which  raise  food  and  raw  materials.  If  the 
world  were  a  single  nation,  and  population  was  distributed 
throughout  solely  on  economic  impulses,  things  would 
happen  as  theory  presupposes.  In  point  of  fact,  English 
commercial  agents  are  in  every  port  in  the  world  for 
economic  purposes.  They  are  members  of  an  industrial 
and  not  a  political  entity.  But  they  are  there  in  the  pur- 
suit of  fortune,  and  with  no  purpose  of  residence,  citizen- 
ship, and  the  founding  of  a  home  for  themselves  and  their 
children.     A  world  built  up  on  scientiiic  economic  con- 


178  PROTECTION  VS.   FREE  TRADE. 

siderations  would  be  very  different  from  tlie  existing  one. 
But  it  is  divided  into  nations,  and  economic  considerations 
have  had  little,  we  might  say  no  share  in  bringing  it  about. 
If  every  extension  of  the  habitable  globe  had  reference  to 
the  world's  commerce,  and  every  new  enterprise  to  market 
values  in  that  commerce,  political  lines  would  be  differ- 
ent. It  shows  what  a  blunder  has  been  made  in  the 
Providential  ordering  of  things,  that  the  structure  was  not 
put  up  according  to  the  plans  and  specifications  of  David 
Kicardo  and  New  England  college  professors.  If  men 
could  be  born  where  they  pleased,  or  if  men  could  and 
would  go  freely  from  one  country  to  another  when  the 
demand  for  the  products  of  their  industry  in  their  na- 
tive land  failed,  or  when  the  pursuit  of  an  occupation  in 
which  they  had  special  aptitude  is  incapable  of  being  car- 
ried on — if  men  did  not  care  where  they  lived  and  where 
they  died — we  might  assent  to  speculations  as  to  what 
would  be.  If,  on  the  other  hand,  all  the  motives  of  life, 
except  economic  ones,  keep  him  in  his  political  home,  the 
capacity  and  opportunity  of  a  man  to  work  at  all  may  de- 
pend on  governmental  restraints  on  the  products  of  foreign 
labor,  and  the  industrial  entity  must  be  conte)VJiinous  with 
the  pohtical  entity.  It  is  not  a  question  of  protecting  the 
weak  against  the  strong,  or  the  high-priced  laborer  against 
the  low-priced  laborer.  It  is  giving  to  the  laborer  of  a 
given  country  the  market  for  the  products  of  his  labor. 
It  is  to  prevent  the  laborer  himself  from  being  removed 
from  the  country,  and  substituting  therefor  a  trade  in  the 
product  of  his  labor.  The  argument  does  go  equally  well 
either  end  first.  Germany  successfully  keeps  its  lower- 
priced  labor  in  German  industries  on  German  soil  by  pro- 
tecting her  home  market,  and  so  does  France.  Otherwise 
it  might  conceivably  happen  that  there  would  be  no  occa- 
sion for  a  German  to  live  in  Germany.     If  a  man,  in  de- 


ADAM  SMITH— SOME  FACTS  IN  OUR  HISTORY.  179 

termining  in  what  country  lie  sliall  have  a  home,  is  without 
sentiment,  he  may  submit  to  tlie  streams  of  economic  in- 
fluences and  be  thrown  ashore  at  the  first  shoal  he  strikes. 
Oppression  or  disaster  may  force  a  man  to  accept  the 
alternative  of  expatriation,  as  many  millions  have  done, 
but  it  would  be  an  absurd  inversion  of  the  order  of  events 
to  say  that  they  had  done  so  in  deference  to  the  influences 
of  a  scientific  economy  whose  central  seat  was  Manchester, 
say.  "  Once  convince  a  French  peasant,"  says  William 
Dillon,  "  that  he  can  get  higher  wages  for  his  labor  and 
higher  interest  on  his  capital  in  the  Western  States  of 
America  than  in  France,  and,  according  to  the  theory  of 
the  economist,  he  may  be  relied  on  to  go  to  America. 
As  a  matter  of  fact,  we  all  know  that,  in  ninety-nine 
cases  out  of  a  hundred,  he  may  be  rehed  on  to  stay  at 
home." 

But  the  present  national  divisions  of  the  world  were 
not  brought  about  by  economic  impulses.  Free  trade, 
alike  in  theory  and  in  fact,  determines  in  advance  that  we 
shall  in  America  pursue  a  limited  group  of  industries. 
The  historical  and  existing  fact  is  that  we  are  not  here 
for  industrial  considerations  solely.  Being  here,  and  classi- 
fying ourselves,  we  find  we  are  too  numerous  to  supply  all 
our  wants  from  abroad,  and  at  the  same  time  fulfill  the 
conditions  of  the  equation  of  international  demand.  Our 
wants,  as  Prof.  Sumner  says,  originate  in  our  inherited 
traits.  We  must  equate  our  eiforts  one  with  another. 
We  have  fertile  fields  adequate  to  the  supply  of  all  our 
wants  with  self-help — the  moment  we  go  abroad  with  our 
surplus  we  are  as  helpless  as  if  that  surplus  was  in  nutmegs 
or  bananas,  which  nobody  wanted  to  buy.  The  world  does 
not  want  so  many  of  either,  as  a  population  (redundant  in 
this  respect)  which  did  not  come  here  for  the  sole  purpose 
of  raising  nutmegs  and  bananas,  can  supply.      It  is  as  if 


ISO  PROTECTIOX  VS.   FREE  TRADE. 

there  were  too  many  tailors  or  too  many  shoemakers  in  a 
village :  tliey  must  do  something  else  or  go  elsewhere. 

We  have  now  tried  our  hand  at  Prof.  Perry's  "  wholly 
impregnable  position,"  that  "  what  a  nation  purchases  by 
its  exports  it  purchases  by  its  most  efficient  labor,  and  con- 
sequently at  the  cheapest  rate  to  itself."  We  have  seen 
how  its  theory  is  implicated  with  facts.  We  have  seen 
how  the  "  division  of  labor  is  limited  by  the  market,"  and 
that  overproduction  for  a  given  market  breaks  down  ex- 
change values  in  which  alone  resided  superior  efficiency  in 
production,  and  that  when  the  point  of  efficiency  was  over- 
worked we  must  either  stand  idle  or  fall  back  to  a  certam 
average  efficiency  in  production.  What  so  much  as,  it  can 
buy  abroad,  it  purchases  by  its  most  efficient  labor :  but 
what  it  can  buy  in  this  way  is  not  sufficient  to  supply  its 
wants. 

It  remains  to  glance  very  biiefly  at  our  own  history, 
and  to  deal,  not  with  statistics,  which  satisfy  nobody,  but 
with  great  underlying,  pervading,  distressing  facts  which 
marred  the  happiness  and  prosperity  of  the  people,  and 
impelled  the  fathers  of  the  Union  to  some  system  of  re- 
straints on  the  importation  of  foreign  goods,  and  the  im- 
position, as  a  consequence,  of  protective  duties.  They  were 
diiven  to  it  by  the  discovery  that  the  five  assumptions  they 
made,  and  which  we  have  before  referred  to,  were  wrong 
in  fact.  It  was  the  inauguration  of  a  settled  reasoned  na- 
tional policy  and  economy. 

Alexander  Hamilton  (in  1791)  enumerates  seventeen 
branches  of  manufactures  which  had  been  successfully  car- 
ried on  in  the  colonies — to  wit,  leather,  iron,  wood,  flax 
and  hemp,  bricks,  liquors,  paper,  hats,  refined  sugai-s,  oils, 
copper  and  brass  wares,  tin-wares,  carriages,  tobacco,  starch 
and  hair-powder,  lampblack,  and  gunpowder. 

It  would  be  a  mistake  to  confound  the  processes  then 


ADAM  SillTH— SOME  FACTS  IN   OUR  HISTORY.  181 

in  vogue  with  the  present  organization  of  industry.  Manu- 
factures then  were  literally  hand-made.  The  people  were 
mostly  engaged  in  agriculture  and  commerce.  Only  such 
blacksmiths,  carpenters,  masons,  shoemakers,  and  other 
artisans  existed  side  by  side  with  the  fanners  as  were  indis- 
pensable. But  many  tools  were  then  made  by  the  black- 
smiths, and  many  wares  by  the  carpenter,  which  are  now 
made  by  machinery  on  a  large  scale.  All  weaving  was 
done  on  hand-looms.  So  much  of  these  goods  as  could 
be  imported,  were  imported  and  paid  for  by  agricultural 
products.  But  these  went  mainly  to  the  AVest  Indies, 
and  from  this  trade  was  derived  the  means  of  payment  of 
the  imports  from  other  countries.  Then,  as  now,  only  the 
finer  textile  fabrics  were  imported.  Cloths,  linens,  and 
textile  fabrics  were  mostly  homespun.  Ship-building,  of 
wood,  and  the  carrying  trade,  had  been  natural  and  profit- 
able industries.  The  making  of  pig-iron  was  substantially 
an  agricultural  industry,  and  could  only  be  carried  on  where 
wood  was  plenty,  charcoal  being  the  only  fuel  used.^  It 
was  converted  into  bars  under  the  trip-hammer  and  slitting- 
mill.  The  moderately  protective  duties  provided  for  in 
the  first  tariff  act  passed,  under  the  present  Constitution, 
on  July  4,  1789,  had  steadied  up  the  domestic  manufact- 
ures somewhat,  and  the  country  was  passing  the  unhappy 
free-trade  crisis  of  1 783-' 89. 

The  ISTapoleonic  wars  produced  exceptional  and  adven- 
titious markets  until  1808,  when  we  became  involved  in 
European  complications.  In  all  these  years  we  had  ahnost 
a  monopoly  of  the  supply  to  the  belhgerents  of  wheat, 
corn,  and  meat,  the  prices  of  which  were  high,  and  the 
profits  on  the  freight  of  which  were  large.  In  the  mean 
time  England  had  adopted  successfully  the  inventions  of 

'  See  a  very  faithful  and  intcllicrent  account  of  the  iron  industry  in  the 
United  States — "Iron  in  all  Ages,"  James  M.  Swank,  Philadelphia,  1SS5. 


182  PROTECTION  VS.   FREE  TRADE. 

Arkwrio-ht  and  IIar2;reaves  in  cotton  manufacture,  tlie 
use  of  coke  in  the  manufacture  of  iron,  and  Cort's  in- 
vention of  puddling  and  rolling  iron.  So  long  as  the  for- 
eign market  held  out,  we  advantageously  supplied  our  need 
of  these  products,  cheapened  bj  machinery,  by  our  exports. 
The  political  and  economic  effects  of  the  wars  of  the 
French  Kevolution  kept  the  question  of  protection  in  the 
background,  but  its  expediency  was  never  questioned  by 
Hamilton,  Jefferson,  Madison,  Monroe,  and,  indeed,  Cal- 
houn. How  purely  accidental  and  contingent  our  com- 
mercial advantages  were  during  the  wars,  and  how  depend- 
ent upon  wai's,  appears  from  a  single  fact.  The  Peace  of 
Amiens  lasted  two  years,  1802-'3.  Our  imports  fell  off 
from  $111,300,000  in  1801,  to  $76,300,000  in  1802,  and 
801,700,000  in  1803  ;  our  exports,  from  $91,000,000  in 
1801,  to  $72,000,000  in  1802,  and  $55,800,000  in  1803. 
Flour  was  $10.45  per  barrel  in  1801,  and  fell  to  $G.75  in 
1802-'3.  This  was  the  effect  of  peace  in  Europe.  Our 
prosperity  had  been  artificial. 

JSTo  nation  can  count  on  continual  prosperity  based  on 
disasters  to  other  nations.  In  1806  England  had  estab- 
lished a  blockade  of  the  Continent  from  Brest  to  the  Elbe. 
E"apoleon  followed  with  the  Berlin  Decree.  Then  came 
the  English  Orders  in  Council,  and  again  Napoleon's  Milan 
Decree.  In  due  time  came  our  embargo  in  1807 — non- 
intercourse  in  1809,  and  war  with  England  in  1812.  "What 
happened  ?  According  to  Prof.  Sumner :  "  Embargo,  non- 
intercourse,  and  war,  lasting  from  1807  to  1815,  created  an 
artificial  state  of  things  here,  or,  perhaps  I  should  say,  the 
United  States  was  drawn  into  tlie  distortion  and jperver- 
sion  of  industry  and  commerce  which  the  great  wars  were 
producing  in  Europe.  Manufactories  of  various  kinds 
sprang  up  here  to  supply  the  v:ants  of  the  peoj/le^vihcn  cut 
off  from  the  usual  sources  of  supj)ly  by  foreign  exchange. 


ADAM   SMITH— SOME   FACTS   IX   OUR  HISTORY.  1S3 

They  produced  articles  of  inferior  quality  or  design,  gen- 
erally speaking,  but  the  peoiile  had  to  he  satisfied  with 
them.  Tliey  were  sustained  by  the  artificial  difficulties  in 
foreign  exchange,  and  by  the  diminished  profits  of  other 
industries  which  would  have  been  more  jyi'ojitable  hereP'^ 

The  real  truth  is,  our  prosperity,  between  1792  and 
1807,  had  been  artificial  and  factitious,  created  by  foreign 
wars,  during  which  our  commerce  prospered  so  long  as  we 
could  maintain  our  attitude  as  neutrals.  Peace  abroad 
brought  us  back  to  our  normal  condition,  as  seen  in  1802-'3. 

According  to  Prof.  Taussig :  ^  "  This  series  of  7'estrictive 
measures  blocked  the  accustomed  channels  of  exchange 
and  production,  and  gave  an  enormous  stimulus  to  those 
branches  of  industry  whose  products  had  before  been  im- 
ported. Establishments  for  the  manufacture  of  cotton 
goods,  woolen  cloths,  iron,  glass,  pottery,  and  other  arti- 
cles, sprang  up  with  a  mushrooin  growth^ 

One  is  tempted  to  inquire  how  our  fathers  were,  else, 
to  find  the  satisfaction  of  their  desires  ?     Were  they  to  sit 

'  Speaking  of  the  "  distortion  and  perversion  of  industry  "  forced  upon  a 
people  by  restridioiVi,  here  is  what  a  very  distinguished  free-trader  has  offi- 
cially said  as  the  grounds  for  "  returning  thanks  to  God."  The  economic 
effects  of  restriction,  whether  by  war  or  tariffs,  is  the  same,  and  the  "  com- 
pensation "  the  same  under  either  cause.  In  his  annual  message  to  the  Con- 
federate Congress,  in  1863,  Jefferson  Davis  discourses  thus  : 

"  The  injuries  resulting  from  the  interruption  of  foreign  commerce  have 
received  compensation  by  the  development  of  our  own  resources.  .  .  .  Cot- 
ton and  woolen  fabrics,  shoes  and  harness,  wagons  and  gun-carriages,  are 
produced  in  daily-increasing  quantities  by  the  factories  springing  into  exist- 
ence. Our  fields,  no  longer  whitened  by  cotton  that  can  not  be  exported,  are 
devoted  to  the  production  of  cereals  and  the  growth  of  stock,  formerly  pur- 
chased with  the  proceeds  of  cotton.  In  the  homes  of  our  noble  and  devoted 
women — without  whose  sublime  sacrifices  our  success  would  have  been  im- 
possible— the  noise  of  the  loom  and  the  spinning-wheel  may  be  heard 
throughout  the  land.  With  hearts  swelling  with  gratitude,  let  us  then  join 
in  returning  thanks  to  God." 

*  Assistant  Professor  of  Political  Economy  at  Harvard  College. 


184  PROTECTION  VS.   FEEE  TRADE. 

idly  until  a  ukase  from  tlie  professors  at  Harvard,  Yale, 
and  Williams  prescribed  the  time  and  conditions  under 
wliicli  tliej  might  proceed  to  supply  the  necessaries  and 
conveniences  of  life  ? 

"  It  is  sufficient  here  to  note  that  the  restrictive  legis- 
lation of  1808-15  was  for  the  time  being  equivalent  to 
extreme  protection.  The  consequent  rise  of  a  considerable 
class  of  manufactm*ers,  whose  success  depended  largely  on 
the  continuance  of  protection,  formed  the  basis  of  a  strong 
movement  for  more  decided  limitation  of  foreign  com- 
petition." 

Some  concessions  to  this  feeling  came  in  the  tariff  act 
of  1816.  Cotton  and  woolen  goods  were  to  pay  25  per 
cent  until  1819.^  The  act  was  defended  with  great  force 
by  Mr.  Calhoun.  But  there  was  no  general  movement 
made  in  the  direction  of  protection  as  such.  If  there 
was  any  expectation  that  agriculture  and  commerce  would 
be  again  as  profitable  as  they  were  previous  to  1808,  the 
people  were  doomed  to  disappointment.  They  were  to  be 
led  up,  by  an  experience  not  unlike  that  of  1783-89,  to  a 
strong  public  conviction  in  favor  of  protecting  their  in- 
dustries, and  the  enactment  of  legislation  to  that  end. 
Prof.  Taussig  shall  describe  the  order  of  events  after  the 
close  of  the  War  of  1815  :    "The  harvests  in  Europe  for 

'  The  minimum  duties,  which  so  excite  the  ire  of  free-traders,  first  ap- 
pear in  this  act.  The  duty  was  25  per  cent  on  cotton  cloths.  The  minimum 
clause  provided  that  it  should  not  be  less  than  six  and  a  quarter  cents  per 
yard ;  that  is,  that  the  goods  should  be  considered  to  have  cost  twenty-five 
cents  per  yard.  Cotton  cloths  were  then  worth  twenty -five  to  thirty  cents  per 
yard,  and  the  minimum  did  not  increase  the  duty.  The  price  of  cotton  fell 
in  1819  to  nineteen  cents,  in  1826  to  thirteen  cents,  and  in  1829  to  eight  and 
a  half  cents  per  yard.  The  clieapcr  goods  became,  of  course,  the  larger  •per 
cent  the  tariff  bears  to  the  cost.  The  nearer  we  come  to  supplying  the  domes- 
tic demand  by  the  domestic  production,  the  more  it  costs  the  consumer !  This 
is  a  very  cheap  and  superficial  fallacy,  as  is  seen  in  the  case  of  cotton  cloth. 


ADAM  SMITH— SOME  FACTS  IN  OUR  HISTORY.  1S5 

several  seasons  were  bad,  and  caused  a  stronger  demand 
and  higher  price  for  the  staple  food-jjroducts.  The  de- 
mand for  cotton  was  large,  and  the  price  high.  .  .  .  The 
prices  of  breadstuils  and  provisions,  the  staples  of  the 
!North,  and  of  cotton  and  tobacco,  the  sta^^les  of  the  South, 
were  not  only  absolutely  but  relatively  high,  and  encour- 
aged continued  large  production  of  these  articles.  The 
prices  of  most  manufactured  goods  were  comparatively 
low.  After  the  war,  the  imports  of  these  from  England 
were  very  heavy.  The  long  pent-up  stream  of  English 
merchandise  may  be  said  to  have  flooded  the  world  at  the 
close  of  the  JSTapoleonic  wars.  In  this,  as  in  other  coun- 
tries, imports  were  carried  beyond  the  capacity  for  con- 
sumption, and  prices  fell  much  below  the  normal  rates. 
The  strain  of  this  oversupply  and  fall  of  prices  bore  hard 
on  the  domestic  manufacturers,  especially  on  those  who 
had  begun  and  carried  on  operations  during  the  restiictive 
period ;  and  many  of  them  were  compelled  to  abandon 
their  works."  ^ 

Why  did  not  the  people  of  the  United  States  thrive 
under  this  inundation  of  cheap  English  goods  ?  Prof. 
Taussig  tells  us :  "  Prices  began  to  fall  rapidly  and  heavdly, 
and  continued  to  fall  through  1819.  The  prices  of  the 
agricultural  staples  of  the  North  and  South  underv:ent  the 
greatest  change,  for  the  harvests  in  Europe  vjere  again 
good  in  1818,  the  English  corn  laics  of  1816  went  into 
operation,  and  the  demand  for  cotton  fell  off.  .  .  .  The 
prices  of  manufactured  goods  had  already  dechned,  in  con- 

'  "In  1S16  the  English  exported  immense  quantities  of  manufactured 
goods  to  the  Continent  and  to  the  United  States.  The  results  of  these  trans- 
actions were  disastrous.  Our  paper  money  here  also  exercised  its  influence 
to  encourage  overtrading  and  over-importation.  In  1817  the  manufacturers 
were  in  distress,  cries  were  heard  against  the  inundations  of  foreign  goods, 
against  the  drain  of  specie,  and  against  the  balance  of  trade." — Sumner, 
*'  Protection  in  the  United  States." 


186  PROTECTION    VS.  FREE  TRADR 

sequence  of  tlie  heavy  importations  in  tlie  yeai's  immedi- 
ately following  the  war ;  when,  therefore,  the  heavy  fall 
took  place  in  1819  in  the  prices  of  food  and  of  raw  mate- 
rials, in  the  profits  of  agriculture,  in  wages  and  in  rents, 
the  general  result  was  advantageous  for  the  manufacturers. 
...  It  is  easy  to  see  that  the  whole  process  was  nothing 
more  than  the  evolution  of  the  new  state  of  things  which 
was  to  take  the  place  of  that  of  the  period  before  1808. 
Before  that  year  mamifactured  goods,  so  far  as  they  could 
be  obtained  by  importation,  we7^e  imported  cheaply  and 
easily  by  means  of  large  exports  and  freight  earnings. 
These  resources  were  now  largely  cut  off.  Exports  de- 
clined, and  the  imports  in  the  end  had  to  follow  themP 

Thus,  the  facts  of  our  external  commerce  inverted  the 
economic  arch  upon  which  the  theory  of  Prof.  Perry  and 
his  school  is  built. 

For  all  ordinary  cotton  and  woolen  fabrics,  the  indus- 
tries may  be  considered  as  fairly  established  in  1824-'28. 
Tariff  rates  upon  them  have  not  increased  the  cost  to  the 
consumer.  Iron,  pig  and  bar,  has  encountered  some  special 
difficulties  in  production,^ 

'  So  long  as  charcoal  was  the  only  fuel  used  in  making  iron,  its  manu- 
facture would  be  confined  to  countries  where  wood  was  abundant,  as  Norway, 
Sweden,  Russia,  and  the  American  colonies.  During  much  of  the  eighteenth 
century  England  imported  her  crude  iron.  The  use  of  coke  in  the  blast-fur- 
nace came,  in  lYSO,  and  Cort's  processes  of  puddling  and  rolling  in  1783. 
This  worked  a  revolution  in  the  production  of  iron.  Bar-iron,  but  no  crude 
iron,  was  imported  into  the  United  States  before  1808,  although  manufactures 
of  iron,  nails,  spikes,  anchors,  etc.,  were  imported.  In  1816  Congress  was 
asked  for  the  first  time  to  extend  protection  to  pig-iron,  hammered  bars,  and 
rolled  bars.  Pig-iron  continued  to  be  made  of  charcoal.  The  bituminous 
coal-fields  were  too  distant  from  the  centers  of  population  to  render  them 
available  for  the  supply  of  coke.  The  process  of  puddling  was  not  intro- 
duced here  until  1830.  The  use  of  so  refractory  a  fuel  as  anthracite  coal, 
under  a  hot  blast,  was  not  introduced  until  1838.  This  marked  the  turning- 
point  in  iron-production  in  the  United  States.      Improved  and  cheap  pro- 


ADAM  SMITH— SOME  FACTS  IX  OUR   HISTORY.  187 

Tliese  industries  had  all  come  into  existence  between 
1808  and  1816,  when  embargoes  and  war  bad  operated  to 
restrict  foreign  commerce  as  effectually  as  probibitory  du- 
ties. Wbat  was  true  of  the  cotton  industry  was  true  of  tbe 
woolen  and  iron  industries,  and  all  tbe  otbers. 

Prof.  Taussig's  conclusions,  and  concessions  to  tbe  pro- 
tective principle  in  tbe  case  of  cotton  manufactures,  are  true 
of  all  tbe  otbers.  "  Before  1808  tbe  difficulties  in  tbe  Avay 
of  tbe  introduction  of  tliis  brancb  of  industry  were  sucb 
tbat  it  made  little  progress.  Tbese  difficulties  were  largely 
artificial ;  and  tbougb  tbe  obstacles  arising  from  ignorance 
of  tbe  new  processes  and  from  tbe  absence  of  experienced 
workmen  were  partly  removed  by  tbe  appearance  of  Sla- 
ter,^ tbey  were  sufficient,  wben  combined  witb  tbe  stimu- 
lus wbicb  tbe  condition  of  foreign  trade  gave  to  agricult- 
ure and  tbe  carrying-trade,  to  prevent  any  appreciable 
development.  Had  tbis  period  come  to  an  end  witbout 
any  accompanying  political  cbange — bad  tbere  been  no 
embargo,  no  non-intercourse  act,  and  no  war  witb  Eng- 
land— tbe  growtb  of  tbe  cotton  manufacture,  bowever  cer- 
tain to  bave  taken  place  in  tbe  end,  might  have  heen  sub- 
ject to  much  friction  and  loss.  Conjecture  as  to  vrbat 
migbt  bave  been  is  dangerous,  especially  in  economic  his- 
tory ;  but  it  seems  reasonable  to  suppose  tbat,  if  tbe  period 

cesses  in  England,  and  the  tariff  of  1846,  kept  the  industry  in  a  backward 
state  until  1861.  Since  then  the  American  production  has  reached  five 
million  tons  a  year,  and  has  a  capacity  to  supply  the  domestic  demand ;  and 
furnaces  now  make  from  one  hundred  to  one  hundred  and  fifty  tons  a  day, 
when  the  old  charcoal-furnaces  could  scarcely  make  fifty  tons  a  week.  In 
all  essential  respects,  the  industry  was  only  fairly  established  in  1861.  It 
was  then  an  iuTant ;  it  is  now  in  robust  maturity.  It  has  cost  us  something, 
but  it  was  indispensable,  and  was  Avorth  the  cost.  It  has  now  been  incurred 
"  once  for  all." 

1  An  English  artisan  who  came  to  America  in   1789.     There  were  only 
four  cotton-factories  here  in  1803. 


188  PKOTECTION    VS.  FREE  TRADE. 

before  1808  had  come  to  an  end  qiiietlj  and  without  a 
jar,  the  eager  comjjetition  of  weU-estahllfihed  English  man- 
xifacturera^  the  laclc  of  familiarity  with  the  j>rocesses, 
and  the  long-continued  habit,  especially  in  New  England, 
of  almost  exclusive  attention  to  agriculture,  commerce,  and 
the  carrying -trade,  might  have  rendered  slow  and  dijjicuU 
the  change,  however  inevitable  it  may  have  been,  to  greater 
attention  to  manufactures.  Under  such  circumstances 
there  might  have  been  room  for  the  legitimate  application 
of  protection  to  the  cotton  manufacture  as  a  young  indus- 
try. But  this  period,  in  fact,  came  to  an  end  with  a  vio- 
lent shock,  which  threw  industry  out  of  its  accustomed 
grooves,  and  caused  that  striking  growth  of  the  cotton 
manufacture  from  1808  to  1815  which  has  been  described. 
The  transition  caused  much  suffering  /  hut  it  tooTc  place 
sharply  and  quickly.  The  interruption  of  trade  was 
equivalent  to  a  rude  hut  vigorous  application  of  protection, 
which  did  its  ivorh  thoroughly.  .  .  .  On  the  whole,  al- 
though the  great  impulse  to  the  industry  was  given  during 
the  war,  the  duties  on  cottons  in  the  tariff  of  1816  may  be 
considered  a  judicious  application  of  the  principle  of  pro- 
tection to  young  industries."  (Prof.  F.  W.  Taussig,  "  Pro- 
tection to  Young  Industries,  as  applied  in  the  United 
States,"  p.  36.) 

It  thus  appears  that  the  foundations  of  onr  industries 
were  not  laid  in  any  ambitious  purpose  "  to  compete  "  with 
anybody,  but  a  sincere,  honest,  and  compulsory  attempt  to 
realize  the  Satisfactions  of  hfe  out  of  the  conditions  which 
suiTOunded  our  fathers — to  secure  the  only  "  wealth  "  ac- 
cessible to  them. 


CHAPTER  IX. 


SCIENTIFIC    QUESTION. 


A   PURTHEK    ANALYSIS "  THE    ECONOMIC    QUESTION  " — "  THE 


Theke  are  two  points  of  view  from  wliich  this  wliole 
discussion  can  take  place ;  there  are  two  ends  or  consum- 
mations which  tlie  observer  may  contemplate.  The  princi- 
ples of  the  science  will  be  equally  applicable  in  the  process 
of  passing  from  the  point  of  view  to  the  end  contemplated. 
The  practical  maxims  of  business,  as  I  should  prefer  to  call 
them,  will  be  the  same  in  each  case.  The  man  who  enters 
upon  a  manufacturing  enterprise  proceeds,  if  he  is  success- 
ful, upon  these  "  principles  of  the  science  "  or  "  practical 
maxims  of  business,"  and  there  is  no  real  disj^ute  as  to 
what  they  are.  The  man  who  enters  upon  a  mercantile 
enterprise  proceeds  in  like  manner  upon  the  "  principles  " 
and  "  practical  maxims "  applicable  to  his  case,  and  there 
is  no  actual  contention  as  to  what  they  are.  There  is  no 
mystery  connected  with  the  conduct  of  either  pursuit.  In 
point  of  fact,  logically  and  chronologically,  men  had  manu- 
factured and  exchanged  with  varying  fortunes,  centuries 
before  Adam  Smith  wrote  and  before  the  science  of  pohti- 
cal  economy  had  been  thought  of.  The  analysis  of  the 
different  steps  of  production,  exchange,  and  consumption, 
could  only  be  useful  and  take  on  a  scientific  value  so  far  as 
it  conformed  to  the  outward  facts.  The  science,  if  it  is  to 
exist,  must  proceed  in  accordance  w^itli  "  the  buying  and 
selUng,"  and  "  the  buying  and  selling  "  would  not  be  con- 


190  PROTECTION    VS.  FREE   TRADE. 

formed  to  the  mold  of  the  science.  The  operation  of  these 
laws  does  not  depend  on  their  recognition  by  students — 
or  others. 

The  economist  now  comes  upon  a  problem  in  his  sci- 
ence presented  by  the  conditions  of  the  States  of  the  Union 
on  this  continent  a  hundred  years  ago.  He  looks  upon 
theii'  natural  resources,  fertile  lands,  navigable  rivers,  har- 
bors, forests,  coal,  ores,  clays,  and  sands.  He  takes  account 
of  the  mental  and  moral  powers  of  the  population  consid- 
ered as  instruments  for  the  production  of  wealth.  He 
takes  account  of  the  necessaries,  conveniences,  and  luxuries 
of  life,  in  which  they  are  wont,  by  virtue  of  the  civiliza- 
tion they  have  reached,  to  indulge — the  aggregate  of  the 
"desires"  for  which  they  are  willing  to  seek  "satisfac- 
tion "  in  the  consumption  of  the  wealth  they  have  made 
the  exertions  to  create. 

He  contemplates  that  in  a  hundred  years  there  may  be 
fifty  milKons  of  people,  soon  thereafter  to  be  a  hundred 
millions,  and  that  they  will  then  have  overrun,  taken  pos- 
session of,  and  appropriated  all  the  soil,  or  all  the  accessible 
and  valuable  portions. 

He  widens  his  view  and  draws  within  his  range  the 
conditions  of  the  people  of  all  the  world,  their  industrial 
organization,  their  population,  their  standard  of  living, 
their  capacities,  and  their  instruments  of  production.  He 
finds  a  vast,  complicated,  and  effective  regime  of  industry 
there.  He  contemplates  the  respects  in  w^hich  they  pos- 
sess superiority  over  the  inhabitants  of  the  United  States. 
He  inquires  into  the  forces  of  nature  which  have  been 
brought  into  the  service  of  man.  He  estimates  the  advan- 
tages which  steam  and  machinery  have  conferred  upon  dif- 
ferent races  in  their  efforts  to  conquer  nature  to  hmnan 
uses.  He  considers  whether  the  people  of  the  United 
States  have  the  skill,  the  energy,  the  impulses,  and  the 


A  FURTHER  ANALYSIS.  191 

ability  to  extort  tlie  highest  utility  from  these  natural 
agents.  He  reckons  the  relative  cost  in  labor  and  sacrifice 
— the  will-power  and  the  muscle-power  involved  in  the  pro- 
duction of  any  commodity,  in  this  land  and  in  foreign 
lands.  He  finds  there  is  no  product  of  labor  as  such,  which 
can  be  produced  by  the  inhabitants  of  any  land  in  the  same 
latitude,  at  a  less  expenditure  of  human  toil  than  in  the 
United  States.  He  finds  that  in  the  United  States  we  can 
raise  certain  food  and  raw  materials  from  the  soil  at  a 
much  less  expenditure  of  human  labor  than  any  other  peo- 
ple, and  that  for  these  products  there  is  a  Hmited  market 
in  Europe.  It  further  appears  that  the  labor — the  real  sac- 
rifice which  a  workman  in  Europe  puts  into  a  ton  of  iron 
or  a  yard  of  cloth — is  no  less  than  is  required  for  the  like 
ton  or  yard  here ;  but  the  laborer  there  is  content  to  take 
less  wages  and  the  capitalist  less  profits.  He  is  wilhng  to 
put  forth  an  effort  for  production  for  which  he  is  satisfied 
to  take  less  remuneration  in  money  or  fewer  commodities 
in  the  way  of  food,  clothing,  and  shelter  for  his  ^vife  and 
children.  He  finds  that  the  workman  in  the  United  States 
is  unwilling  to  accept  industrial  employment  on  these 
terms.  Eather  than  do  that,  he  will  prefer  the  comfort 
and  the  feeling  of  safety  for  his  wife  and  children  which 
he  can  find  on  the  fertile  lands  which  the  Government  of 
the  United  States  will  give  him  for  nothing — or,  at  least, 
on  terms  which  only  repay  the  cost  of  surveying  them  for 
the  settler.  As  the  owner  of  a  farm,  his  wages  are  now 
the  whole  product  of  his  labor,  swelled  by  the  whole 
amount  of  the  gratuitous  contribution  of  the  original  pow- 
ers of  the  soil  (or  the  space  which  his  natural  instnunent 
of  production  occupies) — the  gift  of  this  Government.  It 
is  not  as  an  agricultural  laborer  that  he  gets  these  returns, 
for  the  hired  labor  on  a  farm  is  the  lowest-priced  labor  in 
the  country.     It  is  as  a  land-owner — as  the  proprietor  of 


192  TROTECTION  VS.   FREE  TRADE. 

the  natural  i7istru7nent  of  production  wliicli  the  State,  for 
reasons  touching  the  public  welfare,  had  freelj  presented 
to  him  as  a  gift ;  for  I  beheve  it  is  conceded  that  the  pri- 
vate title  to  soil  is  given  to  the  owner  as  being  simply  the 
most  expedient  device,  as  yet,  for  reaching  the  best  cultiva- 
tion— producing  to  the  society  the  greatest  results.  There 
is  no  natural  inherent  right  in  the  case.  That  the  owner 
pays  value  for  it  does  not  affect  the  question.^ 

The  economist  now  sees  that  all  the  inhabitants,  whose 
efforts  are  thus  supplemented  by  natural  agencies  of  all 
kinds,  and  who  are  in  a  situation  economic  to  reap  all  the 
fruits  of  their  work,  have  been  enabled  to  adopt  a  higher 
standard  of  Kving,  compared  with  a  laborer  abroad,  and,  by 
consequence,  all  the  other  people  here  demand  like  returns 
if  they  enter  upon  any  of  the  other  pursuits  which  are 
natural  to  a  people  possessed  of  civilization  and  the  means 
of  illustrating  it,  and  which  are  necessary,  if  their  various 
desires  are  to  be  satisfied.  It  is  evident  that  there  is  a  vast 
amount  of  comfort,  content,  and  happiness  possible  to  an 
industrious  and  intelligent  people,  thus  in  possession  of  the 
soil  of  half  a  continent.  The  different  classes  of  society 
which  the  agriculturists  are  compelled  to  have  in  their 
midst— their  parsons,  their  school-teachers,  their  cobblers, 
their  clothes-menders,  their  cellar-diggers,  and  their  fence- 

'  "  Private  ownership  of  land  is  only  division  of  labor.  If  it  is  true,  ia 
any  sense,  that  we  all  own  the  soil  in  common,  the  best  use  we  can  make 
of  our  undivided  interests  is  to  vest  them  all  gratuitously  (just  as  we  now 
do)  in  any  who  will  assume  the  function  of  directly  treating  the  soil,  while 
the  rest  of  us  take  other  shares  in  the  social  organization.  The  reason  is, 
because  in  this  way  we  all  get  more  than  we  would  if  each  owned  some 
land  and  used  it  directly.  Supply  and  demand  now  determine  the  distribu- 
tion of  population  between  the  direct  use  of  land  and  other  pursuits.  .  .  . 
In  modern  society  the  organization  of  labor  is  high.  Some  are  land-owners 
and  agriculturists ;  some  are  transporters,  bankers,  merchants,  teachers ; 
some  advance  the  product  of  manufacture.  It  is  a  system  of  division  of 
functions." — Scmner,  "  Social  Classes." 


A  FURTHER  ANALYSIS.  193 

makers — can  only  be  had  on  the  condition  that  "  they  are 
admitted  to  a  participation  in  the  abundance  enjoyed  "  not 
alone  "  by  the  agricultural  population,"  but  by  the  owners 
of  the  soil,  timber,  water-power,  sands,  ores,  etc.,  in  the 
soil.  For  the  manufacture  of  their  shoes,  their  clothes, 
their  carpets,  their  hats,  their  plows  and  chains,  their  cut- 
lery, their  glass,  their  sewing-thread,  their  salt,  their  borax, 
and  their  quinine,  etc.,  it  seems  there  are  people  in  Eng- 
land and  Germany  willing  to  undertake  them  for  less 
wages,  and  consequently  will  furnish  them  for  a  less  price. 
The  farmer  finds  that  by  sending  his  cotton,  his  wheat,  and 
tobacco  to  England  and  Germany,  he  can  apparently,  and 
for  the  time  being,  really  get  more  iron,  or  steel,  or  calico, 
or  woolen  goods,  or  silks,  or  wines,  or  gloves,  for  any  given 
amount  of  his  surplus,  than  his  neighbors  will  consent  to 
supply  the  same  commodities  for.  But  he  can  only  get 
from  abroad  these  commodities  to  the  extent  to  wliich  he 
can  pay  for  them  by  the  surplus  of  his  abundant  crops.  If 
he  does  not  already  know  it,  he  will  speedily  find  out  that, 
in  the  long  run,  he  can  only  get  the  commodities  he  needs, 
the  imports,  by  means  of  the  food  and  cotton  he  has  to  sell, 
the  exports.  If  he  can  not  sell  abroad  he  can  not  buy 
abroad.  He  will  find  he  can  not  get  his  iron,  and  steel, 
and  calico,  and  woolen  goods,  and  silks,  and  wines,  and 
gloves,  with  the  proceeds  of  what  he  can  sell.  His  con- 
sumption of  manufactured  goods  is  so  great  that  he  can  not 
purchase  them  all  abroad  with  the  surplus  of  any  salable 
commodity  which  he  produces. 

Our  economist  here  has  most  of  the  elements  of  the 
problem  which  the  American  question  presents.  The  peo- 
ple here  who  created  their  government,  freed  from  political 
alliances  with  all  the  other  governments,  had  an  option  to 
begin  an  industrial  system  undisturbed  by  any  entangling 
alliances  with  existing  industrial  organizations.  Contem- 
10 


194:  TROTECTION    VS.  FREE  TRADE. 

plating  all  political,  all  social,  all  ethical,  all  historical,  all 
sentimental,  all  national,  and  all  ethnological  considerations, 
or  looking  at  economic  considerations  alone,  which  of  two 
possible  solutions  of  their  problem  should  they  adopt  ?  For 
the  present  we  shall  assume  the  jural  power  to  adopt  either. 
Divesting  themselves  of  all  impulses,  except  to  create  the 
greatest  amount  of  wealth,  how  should  they  apply  their 
industry  to  the  materials  in  hand  ?  Or,  taking  the  more 
generalized  form  of  the  proposition,  how  should  they  ex- 
pend their  efforts  to  realize  the  greatest  amount  of  satis- 
factions ? 

These  two  j)roblems  of  economics  may  be  stated  thus : 

1.  In  the  words  of  Prof.  Jevons :  "  Given  a  certain 
population,  with  various  needs  and  powers  of  production^ 
in  possession  of  certain  lands  and  other  sources  of  mate- 
rials: required  the  mode  of  employing  their  labor  which 
will  maximize  the  utility  of  their  lyroduceP  ("  Theory  of 
Political  Economy,"  p.  289.) 

2.  As  given  by  Prof.  Sumner :  "  Throwing  aside  all 
technicalities,  the  case  is  to  find  how,  for  a  given  exertion 
and  sacrifice,  to  get  the  maximum  of  material  goodP 
("  Princeton  Eeview,"  March,  1881.) 

Two  distinct  forms  of  possible  achievement  are  open  to 
us,  as  we  work  under  the  first  or  the  second  formula — as 
we  direct  the  forces  at  our  disposal — or  "  let  things  alone." 

Under  the  first  formula  we  shall  pay  little  or  no  atten- 
tion to  industiial  conditions  abroad.  "\Ve  apply  all  the 
powers,  capabilities,  and  energies  of  all  "  the  population  " 
to  all  "  the  lands  and  other  sources  of  our  materials."  To 
this  end  we  might  invite  the  people  of  all  the  world  to 
come  and  help  us.  In  fact,  we  did  invite  them  all  (except 
China),  and,  in  fact,  about  ten  millions  did  come.  This 
mode  of  opening  up  the  opportunities  for  the  full  action 
and  interaction  of  our  mental  endowments  and  physical 


A   FCTETIIER   ANALYSIS.  195 

conditions  would  set  no  limit  to  the  productive  creations 
of  our  industry,  excej)t  the  limitations  of  labor  (number  of 
laborers)  and  capital.  If  we  were  free  from  foreign  inter- 
ference— if,  for  example,  we  had  been  the  only  country  on 
the  planet — cceteris  paribus,  no  absolute  bounds  could  be 
set  to  the  increase  of  improved  farms,  houses,  railroads,  en- 
gines, looms,  tools,  carriages,  pianos,  and  the  thousands  of 
objects  which  swell  the  inventory  of  national  "  needs  "  ;  no 
bounds  except  the  desires  of  the  people  and  the  working- 
power  of  their  brains  and  muscles.  Their  production  would 
go  on  imder  the  laws  of  perfect  competition  between  labor 
and  capital,  and  under  remuneration  in  exact  correspond- 
ence to  labor  and  sacrifice.  Our  national  inventory  in 
1885,  in  these  items  of  weahh,  reaches  the  enormous  sum 
of  $53,000,000,000.1 

But  we  were  not  the  only  people  on  the  planet.  This 
regime  was  impossible  unless  some  plan  of  restriction  was 
devised — some  exclusion  from  our  market  of  some  of  the 
commodities  made  abroad,  either  by  the  mental  resolution 
of  the  people,  or  their  statute  to  that  effect.  These  conse- 
quences might  be  made  to  flow  from  the  enactment  of  a 
positively  prohibitory  statute  as  to  foreign  goods.  They 
might  ensue  from  the  indirect  effects  of  foreign  political 
complications,  as  the  "  Berlin  Decree,"  "  Orders  in  Council," 
and  the  "  Milan  Decree,"  during  the  period  of  the  Kapo- 
leonic  wars ;  or  they  might  result  from  a  state  of  war  in 
which  we  were  parties,  as  in  1812-16  ;  or  again,  they  can 
be  made  to  flow  from  a  "  protective  tariff." 

The  distinct  end  thus  proposed  could  be  reached  by  re- 
strictions  imposed  on  the  importation  of  foreign  manufact- 
ures. The  domestic  manufacture  could  thus  he  protected. 
Under  protection,  the  domestic  manufacture  could  be  es- 
tablished, for,  as  we   see,  it  has  been   established — nay, 

»  Mr.  David  A.  Wells  puts  it  at  $64,000,000,000. 


196  PROTECTION  VS.   FREE  TRADE. 

more,  in  consequence  of,  and  not  in  spite  of,  defensive  du- 
ties. Nor  need  the  question  be  complicated  witli  consider- 
ations of  "  revenue,"  Protection  is  to  be  defended  or 
attacked  on  the  merits  or  demerits  of  the  industrial  philos- 
ophy underlying  it,  dissociated  from  revenue.  In  its  es- 
sence it  is  not  a  question  of  taxation  at  all.  All  attempts 
to  deal  with  it  from  that  point  of  view  only  obscure  the 
issue,  and  insistence  on  treating  it  as  a  question  of  taxation 
is  intended  for  dishonesty  or  sophistry.  I  do  not  allege 
that  protection  and  revenue  are  exclusive  of  each  other,  for 
I  hold  it  demonstrable  that  they  are  not ;  indeed.  Prof. 
Sidgwick,  in  his  work,  the  last  formal  treatise  issued  from 
orthodox  English  economy,  has  sufficiently  proved  that 
taxes  laid  for  revenue  may  be  made  to  operate  protectively 
and  conversely.  But,  as  Prof.  Sumner  says,  "  the  line  be- 
tween them  is  sharp  and  precise,  and  we  can  discuss  the 
wisdom  of  protection,  entirely  aside  from  the  wisdom  of 
raising  revenue  from  customs  duties."  I  am  wilKng  to 
accede  to  Prof.  Perry's  challenge  :  "  If  protection  be  good, 
it  is  good  in  and  of  itseK ;  if  it  is  bad,  it  has  no  business  to 
be  begging  to  lean  on  something  so  respectable  as  revenue. 
The  burden  of  proof,  at  any  rate,  lies  upon  the  man  who 
brings  in  a  theory  interrupting  the  play  of  natural  laws. 
Let  him  bring  forward  and  prove  his  theory  of  restriction. 
Let  us  hear  the  arguments  and  see  the  grounds  that  justify 
the  prohibition  of  an  advantageous  trade."  The  real  ques- 
tion is  whether  we  can  induce  or  stimulate  the  home  indus- 
tries, by  the  means  of  defensive  duties,  to  a  production  of 
commodities  which  will  supply  all  the  wants  of  our  people 
in  the  greatest  ultimate  abundance  and  cheapness. 

Nobody  has  made  any  proposal  to  prohibit  "  an  advan- 
tageous trade."  We  are  trying  to  see  if  we  can  not  do 
better.  We  have  been  exploring  the  data  of  our  own  pe- 
culiar case  in  its  peculiar  facts  to  see  if  it  would  not  be 


A  FURTHER  ANALYSIS.  I97 

more  advantageous  to  supply  our  wants  without  any  for- 
eign trade.  "  Trade "  is  no  very  potent  word  to  conjure 
with.  "  The  trader  is  a  necessity,  not  a  power."  If  we 
can  dispense  with  him,  we  have  got  rid  of  a  serious  source 
of  "  taxation."  The  end  j)roposed  by  protection  is  the  sup- 
ply of  all  our  wants,  so  far  as  possible,  by  the  use  of  our 
own  productive  agencies. 

Under  Prof.  Sumner's  formula,  we  shall  go  about  our 
national  economy  from  an  entu-ely  different  direction.  "We 
now  take  cognizance  of  what  foreign  nations  have  to  sell, 
and  the  terms  on  which  we  can  buy.  We  notice  the  nature 
of  their  wants  and  the  extent  to  which  we  can  supply  them 
on  terms  advantageous  to  ourselves.  We  shall  soon  see 
that  their  requirements  from  us  will  be  the  gauge  of  our 
commerce  with  them.  They  have  not  newly  come  into 
the  industrial  world  as  we  have.  The  adaptations  of  their 
internal  trades  and  exchanges  have  been  already  made  with 
substantial  fixity.  The  adjustments  of  their  foreign  com- 
merce have  come  to  something  like  stability — their  indus- 
trial and  commercial  systems  have  been  estabhshed.  This, 
at  once,  places  us  under  the  necessity  of  adjustments  and 
adaptations  to  already  existing  systems.  They  may  be 
natural  to  the  original  members  of  the  system,  because  the 
system  is  a  development,  a  growth.  To  us,  they  are  arti- 
ficial, and  we  must  fit  ourselves  in  and  piece  tliem  out  here 
and  there.  Long  before  we  appeared,  their  industrial  pro- 
cession was  formed.  And  now,  on  our  an*ival,  we  must 
"  fall  in  "  when  and  where  we  can  squeeze  out  a  place  for 
ourselves.  With  the  procession  as  a  whole  we  can  not 
keep  up,  except  by  staying  at  the  reai*. 

Their  competition  is  not  effective  against  us  in  skill, 
energy,  brain-^^ower,  and  muscle-power.  They  can  not 
work  faster,  or  more  persistently,  or  more  effectively,  but 
they  are  willing  to  take  less  remuneration  for  their  ex- 


198  PROTECTION  VS.   FREE  TRADE. 

penditure  of  labor-power.  It  is  a  warfare  in  which  their 
weakness  becomes  strength,  and  we  are  driven  off  the 
field. 

But  there  are  fields  in  which  we  are  their  superiors. 
There  is  one  point  at  which  competition  can  not  drive  us 
out.  There  are  fields  in  which  we  have  the  aid  of  the 
forces  of  nature.  Agriculture,  the  raising  of  raw  prod- 
ucts, enables  us  to  summon  the  original  and  indestructible 
powers  of  the  soil  to  our  assistance.  The  superabundant 
rewards  of  fertile  acres  added  to  the  rewards  of  our  own 
labor,  constitute  an  aggregate  which  enables  us  to  re-enter 
at  one  point  of  the  international  struggle. 

In  the  struggle  "  a  given  exertion  and  sacrifice  "  at  that 
point  vnW  yield  a  product  with  an  exchangeable  value,  if 
not  unduly  overworked,  which  equalizes  our  condition. 
That  product  then  is  the  one  to  which  the  science  of 
modern  English  political  economy  requires  us  to  confine 
our  industrial  energies.  What  of  skill  and  intelligent  di- 
rection that  pursuit  requires  we  are  to  devote  to  it.  All 
our  industrial  efforts  are  to  be  adjusted  to  the  production 
of  the  commodities  in  which  alone  we  have  the  superiority 
over  the  foreign  producers. 

So  far  as  the  foreign  markets  will  take  the  product  of 
the  most  advantageous  industry,  so  far  we  shall  reap  the 
highest  economic  gain ;  just  filling  the  demands  of  that 
market  we  shall  be  in  economic  equilibrium.  In  case  we 
cause  an  overproduction  we  shall  lose  our  exchange  power. 
In  case  there  is  no  market  abroad,  we  shall  lose  the  whole 
value,  and  besides  be  compelled  to  do  without  the  foreign 
commodity,  for  which  the  only  reliance  we  had  was  the 
export  of  the  product  of  this  most  advantageous  industry. 

For  "a  given  exertion  and  sacrifice"  made  in  our 
special  field  we  produce,  say,  twenty  bushels  of  wheat. 
For  a  like  exertion  and  sacrifice  made  in  the  production 


A  FURTHER   ANALYSIS.  199 

of  iron  we  produce,  say,  one  ton  of  iron.  If  the  excliange 
is  made  liere  at  home,  the  ton  of  iron  will  require  the 
whole  twenty  bushels.  If  the  exchange  is  made  aljroad, 
we  shall  e:et  the  ton  of  iron  for  fifteen  bushels  of  the  wheat. 
The  latter  transaction  manifestly  gives  us  "  the  maximum 
of  material  good  "  for  that  particular  "  exertion  and  sacri- 
fice." But  there  is  a  limit  to  the  quantity  of  wheat  which 
the  foreign  market  will  take  on  any  terms,  and  there  is  a 
very  distinct  limit  to  what  it  will  take  from  the  United 
States.  That  limit  is  the  amount  which  it  takes  to  feed 
the  people  in  other  countries,  diminished  by  the  total  food- 
product  of  these  other  countries.  It  is  fixed  by  the  neces- 
sities for  food  and  the  supjDlies  of  food  in  these  same 
foreign  countries,  and  does  not  in  any  sense  depend  on  the 
amount  of  their  products  which  we  need.  There  is  no 
definite  limit  to  the  iron  and  other  things  which  we  need. 
The  case  of  the  ton  of  iron  and  the  fifteen  bushels  of  wheat 
is  by  itself  very  plain  sailing.  But  suppose  that  in  the  pur- 
chase of  tea,  coffee,  and  sugar,  drugs,  dye-stuffs,  and  chemi- 
cals, which  are  now  articles  of  necessity,  and  of  French 
wines  and  foreign  fruits,  which  are  articles  of  luxury,  and 
of  silks  and  satins,  and  fine  clothes,  which  are  articles  of 
fashion,  we  had  supplied  the  foreign  demand  for  the  prod- 
ucts of  our  most  advantageous  industry :  then  how  is  the 
ton  of  iron  to  be  obtained  ?  Or  if  the  iron  is  obtained,  how 
are  the  other  things  to  be  procured  ?  One  at  a  time  we 
can  supply  our  wants.  But  when  the  infinitude  of  our 
desires  is  aggregated,  what  relation  will  our  exportables,  the 
purchase-money,  bear  to  the  aggregate  of  importables,  the 
satisfaction  which  we  must  purchase  abroad?  We  have 
seen  that  they  break  hopelessly  down.  Can  the  given  "  ex- 
ertions and  sacrifices "  of  us  all  be  made  in  like  manner 
to  result  in  the  maximum  of  material  good  to  us  all  ? 

But  there  is  an  outstanding  reason  to  which  we  have  not 


200  PROTECTION    VS.  FREE  TRADE. 

yet  adverted,  which  preyents  the  supply  of  the  wants  of  all 
of  us  by  the  foreign  exchange.  This  is  the  fact  that  there 
is  no  market  in  the  world  which  contains  the  full  supplies 
which  our  maximum  of  good  involves.  The  world  has  not 
as  yet  accumulated  the  capital,  labor,  and  skill  which  are 
adequate  to  produce  the  requisite  surplus  of  manufactured 
goods — goods  made  in  the  cojnpeti7ig,  "protected"  indus- 
tries— which  are  natural  and  necessary  to  us.  No  nation 
or  group  of  nations  is  rich  enough  to  do  this  for  us.  We 
must  make  the  remainder,  then,  at  home.  The  argument 
in  hand  is  only  in  reply  to  the  logic  which  undertakes  to 
say  what  ought  to  be. 

The  '•  given  exertion  and  sacrifice  "  will  yield  the  prod- 
uct here,  but  what  creates  the  answering  demand  there? 
"What  principle  of  the  science  of  political  economy  corre- 
lates the  capacity  to  produce  here,  with  the  capacity  to 
consume  there  ?  Supply  and  demand  ?  Then  the  supply 
is  to  be  kept  down  to  the  demand.  We  gauge  our  indus- 
try to  the  foreign  capacity  to  consume,  which  is  confessedly 
limited.  Having  filled  that  capacity,  we  either  do  nothing, 
or,  having  reduced  our  most  advantageous  industry  to  nil, 
we  now  take  to  other  industries.  That  is,  having  over- 
produced ourselves  out  of  the  foreign  market,  we  are  now 
poor  enough  to  undertake  the  hitherto  "  unprofitable  "  in- 
dustries ;  we  are  compelled  to  abandon  an  "  advantageous 
trade." 

Bursting  suddenly  into  the  industrial  world,  and  pro- 
ducing, without  reference  to  foreign  markets,  there  could 
in  the  nature  of  things  be  no  assurance,  not  even  a  chance, 
that  our  production  would  fit  the  existing  conditions  of  a 
world's  market.  There  could  be  no  rational  prevision  of 
the  state  of  the  world's  market,  and  no  rational  adjustment 
to  its  needs.  Discarding  exchangeable  values,  we  should 
have  gone  on  producing  ilhmitable  supplies ;  what  might 


A  FURTHER  ANALYSIS.  201 

have  saved  us,  and  wliat  lias  saved  us,  was  the  nature  of 
our  production^  and  the  fact  that  it  furnished  subsistence, 
especially  to  men  in  our  own  country.  If  we  had  a  trade 
with  some  other  planet — if  Mars,  for  instance,  had  been 
an  available  foreign  market — we  might  have  reached  the 
maximum  of  material  good  by  exchanges.  As  it  was, 
we  had  no  recourse,  except  either  to  consume  it  at  home,  in 
the  prosecution  of  allied  industries,  or  stop  making  the  "  ex- 
ertion and  sacrifice  "  required  in  its  production. 

The  second  formula  will  do  this  for  us :  it  will  give  us 
the  maximum  of  material  good  on  two  conditions,  namely  : 
that  we  make  the  precise  "  exertion  and  sacrifice,"  and  no 
more,  necessary  to  produce  a  su)plus,  which  the  foy^eign 
market  will  take  /  and  then  that  we  continue  only  to  need 
and  desire  the  number  and  amount  of  things  which  that 
surplus  loill  pay  for. 

Conformity  to  these  conditions  could  only  be  realized 
by  legislative  omniscience,  which  the  protectionist  never 
ventured  to  invoke ;  or  the  "  guidance  of  an  Invisible 
hand,"  which  even  the  theology  of  Adam  Smith  never 
recognized  as  operative.  The  true  problem  is,  then,  not 
"  for  a  given  exertion  and  sacrifice  "  to  get  the  maximum 
of  "  material  good."  It  is  rather  to  so  occupy  our  "  field  of 
employment "  that  we  can  expend  upon  it  all  the  exertions 
and  all  the  sacrifices  which  we  as  a  people  are  willing  and 
able^  to  make  ;  to  get  the  maximum  for  all  which  is  possi- 
ble, when  all  our  abilities  and  all  our  energies  are  called 
into  play. 

Unless  one  occupies  the  point  of  view  from  which  he 
can  contemplate  all  the  efforts  which  the  whole  fifty  mill- 
ions of  us  are  capable  of  making,  and  all  the  good  which 
the  whole  fifty  milHons  of  us  are  capable  of  enjoying,  he 
has  no  business  either  as  the  writer  of  text-books  on  econ- 
omy, of  essays  in  reviews,  or  as  a  statesman  in  Congress,  to 


202  PROTECTION    VS.  FREE  TRADE. 

assume  to  be  in  intelligent  possession  of  knowledge,  or  to 
suggest  intelligent  legislation  on  this  subject.  Such  em- 
piricists might  as  well  undertake  to  make  j^rovision  for  the 
civic  wants  of  the  population  of  a  great  city,  provide  insti- 
tutions affecting  its  sanitary,  2")olice,  and  fiscal  systems,  after 
having  simply  explored  one  of  its  blind  back  alleys.  Be- 
cause some  of  the  inhabitants  got  their  water-supply  from 
the  town-pump,  they  assume  that  all  could  ;  or,  because  one 
sewer  relieved  part  of  the  waste,  they  conclude  that  it  could 
take  it  all  out  of  the  corporate  limits. 

Because  we  have  some  most  advantageous  industries, 
which  employ  some  of  our  energies  and  some  of  our  skill, 
it  is  decreed  that  we  are  not  to  occupy,  with  the  energies 
and  skill  unemployed,  any  less  advantageous  ones.  Be- 
cause we  can  make  some  exchanges  advantageously  abroad, 
it  is  assumed  we  can  make  all  our  exchanges  advantageous- 
ly abroad.  Our  national  growth  and  the  fallness  of  our 
national  life  are  to  be  adjusted  by  and  adapted  to  the  con- 
ditions of  the  outer  industrial  world.  We  are  asked  to 
regulate  our  conduct  by  the  exigencies  of  exchangeable 
values,  and  not  by  the  exercise  of  all  our  productive  forces. 
These  are  to  be  employed,  not  with  reference  to  their  in- 
herent and  natural  capacities,  but  are  to  be  fitted  to  a  Pro- 
crustean bed,  not  made  to  our  measure.  Our  vast  powers 
of  production  are  to  be  idle,  or  to  be  subordinated  to  the 
mere  accidents  of  foreign  exchange  values — our  stream  of 
creative  agencies  to  be  kept  within  the  bounds  of  the  for- 
eign estuary  into  which  it  flows — our  illimitable  freedom 
of  scope  and  variety  to  be  dwarfed  into  the  measure  of  the 
comfortless  slavery,  and  consequent  want  of  purchasing 
and  consuming  power,  of  the  toiler  in  other  lands.  We 
are  to  be  cast  in  a  mold  the  size  and  form  of  which  are  not 
in  correspondence  with  our  internal  forces,  but  which  con- 
form to  the  repressive  power  of  an  external  rigid  obstacle. 


I 


A  FURTHER  ANALYSIS.  203 

The  advocate,  then,  of  unrestricted  trade  must  contem- 
plate the  limitations  whicli  thus  in  the  nature  of  his  prob- 
lem surround  the  growth  of  the  nation :  a  certain  number 
of  laborers  only,  and  a  certain  amount  of  capital  only,  can 
profitably  enter  into  the  special  industries  of  the  country. 
We  take  up  a  limited  field  in  the  international  division  of 
labor.  That  "  division  of  labor  is  limited  by  the  market." 
There  are  no  canons  of  the  science  of  political  economy  by 
which  we  can  forecast,  under  this  7'egiine,  the  rate  of  our 
progress  and  growth.  What  may  be  positively  aflirmed 
by  any  man  of  average  intelligence  would  be  the  sharp  an- 
tithesis between  the  outcome  with  '"'free  trade  "  and  "  pro- 
tection." One  economist  may,  in  entire  good  faith,  prefer 
the  form  of  national  life  which  would  naturally  flow  from 
agricultural  pursuits — the  comfort,  contentment,  and  in- 
telHgence  of  a  people  devoted  to  food-raising.  They  make 
their  few  foreign  exchanges  without  excitement.  They 
are  out  of  the  roar  and  waste  of  industrial  machinery.  They 
are  exempt  from  the  suffering  and  disaster  of  commercial 
crises.  But  they  have  bought  their  ease  and  independence 
at  the  cost  of  "  wealth  "  and  higher  social  life.  The  de- 
cision must  turn  on  the  radically  different  views  of  human 
society  which  the  observer  takes.  The  free-trader  says : 
"  A  new  country  can  not  have  the  higher  social  develop- 
ment until  the  population  begins  to  grow  dense.  It  is  so 
with  us  yet.  We  have  not  the  literature  or  the  science  or 
the  fine  arts  of  the  old  countries,  but  we  have  not  their 
poverty  and  miseiy.  We  must  take  our  advantages  and 
disadvantages  together."  (Sumner,  "  Protection  in  the 
United  States,"  p.  26.)  We  are  to  accept,  then,  our  assign- 
ment to  the  rdle  of  food-raising  for  other  nations.  In  the 
long  decades  of  the  future  we  may  have  a  population  dense 
enough  to  give  us  a  higher  social  development.  It  is  true 
there  is  no  case  in  all  history  in  which  such  a  state  of 


204:  PROTECTION    VS.   FEEE  TRADE. 

things  ever  arose  in  a  purely  agricultural  state,  or  out  of  an 
agricultural  state  without  "  a  lift."  But  in  time  the  leveling 
process  will  reduce  our  profits  to  a  point  at  which  manu- 
facturing will  come  in  naturally.  We  can  not  force  them. 
"VVe  go  on  rudely  competing  with  all  the  food-raisers  of  the 
world — competing  in  a  market  which  is  limited  and  vari- 
able. We  shall  have  a  uniform  overproduction,  and  the 
market  will  be  a  place  where  we  can  give  away  our  goods 
rather  than  a  mart  in  which  we  can  sell  them.  The  laws  of 
trade  and  the  principles  of  nature  as  expounded  by  Bastiat 
and  Perry  compel  us  to  share  the  "  gratuities  "  of  our  soil 
witli  the  foreign  nations  with  whom  we  trade,  and  to  raze 
the  exchangeable  value  of  our  products  to  the  point  where 
the  American  farmer  only  gets  compensation  for  his  own 
labor — or  his  "  onerous  contribution  "  to  their  value.  All 
over  the  world  the  food-raisers  are  making  all  the  crops 
which  are  possible — a  fa/m  is  an  instrument  of  production 
which  the  owner  is  not  likely  to  abandon.  In  point  of  fact 
there  are  only  two  or  three  nations  on  the  whole  earth 
which  do  not  raise  their  own  food.  In  most  countries 
there  is  a  surplus — an  overproduction.  Of  course,  ex- 
change values  disappear.  At  the  same  time  the  special 
characteristics  of  the  commodity  in  which  the  overj^roduc- 
tion  takes  j)lace  disguise  and  hide  the  enormous  economic 
fallacy  which  urges  such  an  overproduction.  The  food- 
raiser  can  subsist  on  his  food — he  can  consume  his  own 
product — he  will  not  die  of  starvation.  He  can,  at  least, 
"  live  and  be  comfortable."  So  far  in  the  United  States 
the  free-traders  have  been  able  to  hide  away  competitors  in 
overcrowded  industries  on  the  soil.  This  device  has  been 
open  to  them.  Thus  the  surplus  labor  has  been  kept  in 
abeyance,  and  has  offered  no  hindrance  to  the  free  applica- 
tion of  abstract  theories.  An  ugly  factor  in  the  problem 
was  thus  put  out  of  sight,  but  not  got  rid  of.     The  unem- 


A  FURTHER  ANALYSIS.  205 

ployed  laborer  will  soon  reappear  to  us,  and  provision  must 
be  made  for  him.  So  special  an  overproduction  in  any- 
other  industry  would  be  seen  to  be  attended  with  fatal 
commercial  consequences.  Such  an  overproduction,  and 
so  continuous,  in  calico,  or  iron,  or  steel  rails,  or  shoes, 
would  destroy  their  manufacturers.  These  must  be  sold — 
these  must  be  exchanged.  The  farmer  can  eat  his  over- 
production some  time  or  other.  The  glut  is  only  incon- 
venient, it  is  not  fatal,  industrially.  But  the  manufacturer 
can  not  eat  his  calico,  nor  the  iron-man  his  steel  rails.  If 
they  could,  we  should  see  overproduction  on  a  large  scale. 
Inasmuch  as  things  are  as  they  are,  the  mill-owner,  the 
furnace-man,  and  the  anthracite- coal  miner  must  now  "  shut 
down."  But  the  farmer  never  shuts  down.  There  is 
neither  strike  nor  "  lock-out  "  in  his  industry.  The  enor- 
mous commercial  gains  which  the  farmer  fails  to  reap — or, 
rather,  the  enormous  losses  which  accrue  to  him  by  reason 
of  his  overproduction — are  forever  concealed  by  virtue  of 
the  consumable  nature  of  his  product.'  If  they  were  sala- 
ble, as  well  as  consumable,  the  wretched  waste  which  we 
know  annually  takes  place  in  American  tillage  would  be 
manifest,  and  could  be  avoided.  Not  only  in  remote  and 
inaccessible  sections,  but  in  regions  which  may  be  seen  by 
the  traveler  from  the  window  of  the  railroad-car  in  which 
he  is  riding,  may  be  observed  wretched  evidence  of  the 
lethargy  and  inertia  which  follow  productive  fields,  careless 
methods,  and  unsalable  crops.  Corn  half  gathered  or  in 
unopened  cribs — stacks  of  unused  hay  and  stalks — ill-fed 
cattle  trampling  their  fodder  under  feet — betray  the  nerve- 

*  In  1880  the  crop  of  wheat,  corn,  oats,  bailey,  rye,  buckwheat,  and  po- 
tatoes aggregated  2,885,853,071  bushels,  and  sold  for  $1,442,559,918.  In 
1881,  what  was  called  a  short  crop  of  the  same  products — to  wit,  2,175,1'75,- 
164— sold  for  $1,570,248,541,  In  other  words,  1lO,6l7fiOl  less  bushels  sold 
for  $127,488,623  more. 


206  TROTECTIOX    VS.   FREE   TRADE. 

less,  motiveless  result  of  using  a  natural  instmment  of  high 
productive  power,  with  capacity  to  keep  a  man  from  dying 
of  mere  starvation,  but  which  besides  possesses  little  wealth- 
creating  vahie.  The  waste  of  labor,  energy,  and  capital 
misdirected  into  these  most  advantageous  industries,  with 
its  reaction  on  the  character  of  the  people,  has  vastly  ex- 
ceeded all  the  losses  incurred  by  protection  in  the  effort  to 
divert  them  into  "  unprofitable "  furnaces,  factories,  and 
mills. 

We  are  seeking  a  solution  of  the  question  in  its  eco- 
nomic asj)ects,  and  not  in  its  political,  moral,  and  educa- 
tional aspects.  I  am  not  aware  that  it  has  ever  been  con- 
tended that  the  gross  annual  product  of  the  industry  of  the 
United  States  is  not  greater  under  the  doctrine  of  our  pro- 
ductive forces  than  under  the  notion  of  exchangeable  val- 
ues— that  we  can  not  make  more  values  at  home  than  we  can 
buy  abroad ;  nor  am  I  aware  that  any  free-trader  has  ever 
indicated  what  direction  skill  and  labor  were  to  take  if  we 
abandoned  the  protected  industries.  They  make  vague 
statements  that  people  will  find  something  to  do.  "  As  for 
the  scope  for  varied  talents,"  says  Prof.  Sumner,  answering 
Alexander  Hamilton's  celebrated  report  of  1791,  "  persons 
go  to  the  places  which  offer  an  arena  for  their  talents.  They 
do  not  sit  still  and  say, '  Let  us  make  an  arena  here.'  .  .  .  As 
for  the  varied  field  for  enterprise,  the  world  opens  that,  and 
our  enterprises  seek  the  place  of  advantage." 

Precisely :  such  "  persons  "  and  such  "  enterprises  "  can 
leave  the  country  and  seek  employment  and  habitations 
elsewhere.  Thus  easily  the  free-trader  whistles  one  fourth 
of  our  population  and  one  half  of  the  value  of  the  nation's 
property  down  the  wind.  In  this  way  he  makes  the  facts 
confonn  to  his  theory,  and  establishes  the  ideal  of  his  re- 
public. The  protectionist  would  sit  still  and  say :  "  Let  us 
make  an  arena  here.     By  restrictions,  industries  here  will 


A  FURTHER  ANALYSIS.  207 

diversify  themselv^es  under  the  operation  of  natural  forces. 
The  development  of  society  will  be  as  regular  and  natural 
as  that  of  a  plant.  There  will  be  no  forcing,  and  the  bud 
will  burst  into  a  blossom  at  the  proper  moment.  Keep  the 
foreign  competition  oif  our  backs,  and  we  shall  at  once  en- 
ter upon  the  domestic  arena  in  all  its  dimensions  without 
loss  of  time,  waste  of  capital,  or  dissipation  or  misdirection 
of  energy.  It  may  stimulate  us  to  greater  exertions,  and 
we  may  work  harder ;  but  we  are  capable  of  the  exertions, 
and  are  willing  to  work  harder.  We  reap  the  reward  of  our 
untiring  exertions."  We  see  that  there  is  neither  a  waste 
of  one  nor  a  miscarriage  of  the  other.  They  will  be  em- 
bodied in  articles  of  material  "  wealth,"  and  we  shall  make 
and  have  exactly  as  many  as  we  choose  to  have.  Of  this  we 
can  have  no  assurance  under  the  conditions  of  dependence 
on  foreign  commerce  and  the  exchangeable  value  of  our 
own  commodities  always  determined  in  a  market  always 
oversupplied. 

Prof.  Perry  exclaims,  "  There  can  be  no  science  of  ex- 
changes if  an  economic  reason  can  be  given  for  restricting 
them."  Not  stopping  to  expose  the  ambiguity  lurking  in 
his  use  of  the  word  restriction^  it  is  manifest  that  we  have, 
from  our  two  points  of  view,  a  choice  between  the  foreign 
exchange  and  the  domestic  exchange.  We  can  at  our  pleas- 
ure have  either,  but  can  not  have  both  at  our  option  at  the 
same  time — we  can  not  have  the  one  and  then  the  other 
by  turns — we  can  not  vibrate  thus  between  stagnation  and 
activity — the  forces  of  production  can  not  thus  be  turned  on 
and  off  at  pleasure.  In  manufactures,  such  as  can  only 
exist  under  some  form  of  excluding  the  foreign  product,  it 
is,  as  we  shall  see,  all  or  none.  So  far  as  we  shut  out  the 
product  of  foreign  labor  we  are  thrown  back  to  the  em- 
ployment of  domestic  labor.  This  you  may  call  "restrict- 
ing exchanges,"  if  you  please — it  is  restricting  some  ex- 


208  PROTECTION  VS.   FEEE  TRADE. 

changes.  But  we  liave  infinitely  enlarged  our  doniestic 
exchanges.  We  have  exercised  our  option,  and  now  the 
number  of  domestic  exchanges  has  increased  many  fold. 
If  there  is  '•  a  gain  in  every  exchange,"  which  is  the  pet 
benignity  of  the  science,  the  exchanges  are  multiphed,  and 
the  gains  are  shared  by  our  own  people.  We  have  pro- 
voked a  double  production  and  a  double  consumption. 
Where  is  the  waste  ?  Where  the  loss  ?  Where  the  fric- 
tion? The  only  extra  cost  to  the  nation  for  all  and  all 
kinds  of  the  products  of  its  protected  industries  is  the 
added  comfort,  the  increased  food,  better  clothes,  superior 
shelter  which  its  laborers  have  consmned  and  enjoyed — a 
result  made  possible  by  their  higher  wages.  The  American 
laborer  is  a  higher-priced  "  tool."  But  the  only  true  func- 
tion of  a  government  is  to  make  such  tools  possible.  We 
scarcely  dare  use  the  words  man  and  his  welfare  as  terms 
involved  in  discussing  political  economy,  for  fear  of  being 
suspected  of  sociological  speculations.  If  now  we  take 
into  the  account  the  number  of  people  in  the  United  States 
and  the  inventory  of  their  wealth,  it  is  obviously  absolutely 
and  proportionally  greater  than  free  foreign  trade  would 
have  given  us.  If  we  substitute  "  satisfaction  of  desires  " 
for  "wealth"  as  the  true  end  of  all  our  labor  and  absti- 
nence, we  shall  the  more  readily  agree  to  this.^  The  free- 
trader is  confronted  with  the  palpable,  undeniable,  inex- 

'  "  Hence,  either'  prosperity  in  a  free-trade  country  or  distress  in  a  protec- 
tionist country  is  fatal  to  protectionism,  while  distress  in  a  free-trade  country 
or  prosperity  in  a  protectionist  country  proves  nothing  against  free  trade." 

This  flexible  test  of  results  I  find  in  a  little  book,  "  Protectionism,"  issued 
by  Prof.  Sumner  since  the  text  was  in  type.  Of  course,  in  that  test,  no  ar- 
gument from  experience  and  observation  possesses  any  validity.  Prof.  Sum- 
ner risks  the  whole  debate  on  the  proposition,  "  Free  trade  is  only  a  mode  of 
liberty.''''  Protection  is  "  a  social  abuse,  an  economic  blunder,  and  a  political 
evil."  In  dealing  with  it  in  "  Protectionism,"  he  says  he  has  not  troubled 
himself  "  to  keep  or  throw  off  scientific  or  professional  dignity."     Ilis  last 


A  FURTHER  ANALYSIS.  209 

pugnable  fact  that  the  domestic  production  and  exchange 
have  resulted  in  an  inestimable  increase  of  the  products, 
things,  commodities,  the  property,  the  fixed  and  floating 
capital  of  the  nation,  as  well  as  the  population  of  the  na- 
tion. In  the  nature  of  things,  if  all  the  men  engaged  in 
rendering  mutual  "  services  "  to  each  other  live  here,  there 
must  be  more  products  on  this  area  than  if  half  of  them 
lived  three  thousand  miles  away.  The  free-trader  keeps  up 
liis  monotone  that  protection  "does  not  increase  wealth. 
It  is  mathematically  demonstrable  that  it  lessens  wealth." 
He  only  means  that  some-of-us  might  have  more  comfort 
with  less  work  if  the  others  had  not  entered  into  this  arena 
of  the  world's  industry  alongside  of  that  some-of-us.  He 
probably  assumes,  and  justly,  that  free  trade  would  have 
kept  them  away. 

Under  the  second  formula,  then,  a  given  exertion  and 
sacrifice,  by  some-of-us,  may  yield  the  'inaximum  of  ma- 
terial good  to  some-of-us — the  others  not  being  in  America. 
But  all  the  exertions  of  all-of-us  expended  in  view  of  for- 
eign exchange  may  only  yield  the  minimum  of  material 
good.  Our  imports  are  limited  by,  and  must  be  paid  for, 
by  our  exports.  The  moment  we  have  supplied  the  foreign 
demand,  that  moment  we  must  quit  wanting  more  foreign 
things,  quit  having  more  population,  and  quit  making 
more  agricultural  products.  The  maximum  of  material 
good  will  be  derived  only  by  that  some-of-us  who  own  the 
soil,  and  the  others-of-us  have  no  call  to  live  in  the  United 

work  shows  no  new  ground  occupied  by  him.  I  do  not  say  that  Prof.  Sumner 
is  not  right  in  this  business ;  I  only  say  I  am  unable  to  see  that  he  is  right. 

Beheving  he  can  safely  stand  on  his  abstract  maxim,  he  deals  with  pro- 
tectionism as  "  deserving  only  contempt  and  scorn,  satire  and  ridicule." 

If  he  is  right,  he  can  afford  the  air  of  the  burn-your-bridges-behind-you 
young  man  which,  intentionally,  is  made  to  pervade  "Protectionism."  If  he 
is  not  right,  his  book  is  about  the  worst  piece  of  professional  insolence  yet 
put  into  print. 


210  PROTECTION    VS.  FREE  TRADE. 

States,  and  no  calling  if  we  live  tliere.  If,  after  that,  all 
of  us  go  on  producing  food,  we  can  only  procure  tlie 
"  satisfaction  "  of  our  "  desires "  for  manufactm-ed  goods 
by  producing  tliem  at  home,  and  under  the  conditions  of 
protection.  A  farmer  is  just  as  capable  of  forming  a  cor- 
rect judgment  on  the  purchasing  power  of  his  products 
under  these  limitations  as  any  college  professor. 

More  than  that,  we  shall  fail  to  get  the  commodities  we 
need,  and  which  constitute  our  "  material  good."  Of  such 
commodities — the  product  of  the  competing  protected  in- 
dustries— the  people  of  the  United  States  consume  amm- 
ally  about  $3,000,000,000.  We  import  about  $400,000,- 
000  of  hke  commodities,  and  about  $300,000,000  worth  of 
merchandise,  which  we  can  neither  raise  in  this  climate  nor 
manufacture.  If  we  went  without  the  latter,  we  should 
still  (unless  our  nature  was  clianged  by  rude  labor)  desire 
$2,600,000,000  of  goods  made  in  protected  industries.  We 
can  export  only  $700,000,000  in  agricultural  products.  How 
are  we  to  get  this  $2,600,000,000  of  "  satisfaction  "  of  "  de- 
sires "  I  for  this  is  what  constitutes  the  maximum  of  material 
good — our  welfare.     This  is,  at  last,  the  use  of  "  wealth." 

Prof.  Sumner's  solution  of  the  problem  breaks  down. 
You  can  not  l)uy  $2,600,000,000  worth  of  imports  with 
$700,000,000  of  exports.  The  foreign  market  does  not 
want  its  pay  in  oitr  hind  of  merchandise — food  and  raw 
materials.  That  market  has  other  sources  of  supply,  as  we 
have  found  out  to  our  discomfiture.  We  shall  endeavor  to 
analyze  this  more  in  detail  in  the  chapter  entitled  "  Sched- 
ule A." 

The  supplying  of  our  "  various  needs  " — the  "  various 
needs"  of  all  of  us — is  the  object  of  all  our  industrial 
efforts.  The  "  maximum  of  material  good  "  for  "  a  given 
exertion  and  sacrifice  "  is  a  description  of  a  case  in  w^hich 
a  few  men,  who  had  appropriated  natural  agents,  might 


A  FURTHER  ANALYSIS.  211 

thrive  best  if  tliey  were  allowed  to  maintain  their  advan- 
tage as  monopolists. 

We  are  now  in  a  position  to  answer  two  of  the  ques- 
tions propounded  by  Prof.  Sumner. 

"  The  economiG  question  about  the  tariff  is,  Does  it 
enable  the  jpopulation  of  the  country  to  command  greater 
material  good  for  a  given  effort  f  "  AYe  answer  distinctly, 
that  it  enables  all  the  ^o])ulation  to  command  the  greatest 
material  good  ^  that  is,  to  sujpylij  all  their  various  wants 
at  the  least  possible  eff'ort. 

"  The  scientijiG  question  about  protection  is.  Does  it 
lessen  the  ratio  of  effort  and  sacrifice  to  comfort  and  enjoy- 
ment ? "  We  answer  distinctly,  that  protection — that  is, 
the  scheme  of  direct  production — gives  us  the  highest 
comfort  and  greatest  enjo}mient  with  the  least  effort.  In 
other  words,  the  ratio  of  effort  to  comfort  and  enjoyment 
— to  the  "satisfaction"  of  our  "desires" — is  less  under  a 
regime  of  the  use  of  all  our  productive  forces  than  under 
tlie  theory  of  exchange  values. 

It  is  not  only  the  easiest,  it  is  the  only  way  to  procure 
satisfaction  of  our  desires.  When  there  is  only  one  real 
route  to  a  given  result,  it  is  idle  to  discuss  its  relative,  ad- 
vantages, or  disadvantages,  with  respect  to  purely  imagi- 
nary ones.  When  there  is  only  one  actual  way  to  procure 
a  thing,  it  is  a  useless  waste  of  time  to  discuss  the  "  ratios  " 
of  "  effort "  involved  in  exploring  the  impossible  or  the 
speculative. 

Two  railroads  run  from  New  York — one  to  Philadel- 
phia, the  other  half-way,  to  Trenton.  The  rates  to  each 
place,  we  will  suppose,  are  tlie  lowest  possible  on  each 
route.  The  fare  to  Philadelphia  is  two  dollars  and  a  half, 
the  fare  to  Trenton  is  one  dollar.  To  a  man  who  desires 
to  make  the  entire  trip,  the  only  resource  is  the  through 
line.     His  maximum  of  material  good  for  this  effoii;  is  to 


212  PROTECTION  VS.   FREE  TRADE. 

get  to  Philadelpliia,  To  liim  it  is  nothing  that  tlie  fare  to 
Trenton  is  at  a  lower  rate  :  the  cost  is  not  the  determining 
motive  for  him. 

To  a  people  who  are  desirous  of  consuming  $2,600,000,- 
000  worth  of  goods,  inforaiation  where  they  can  get  only 
$700,000,000  worth  of  them,  even  at  a  less  rate,  is  of  no 
particular  use.  In  the  case  in  hand,  the  $2,600,000,000  is 
the  maximum  of  good  we  desire  to  reach,  and  we  find  it 
in  the  home  market. 

This  is  the  terminus  of  the  passage  represented  by  the 
through-trip  ticket.  As  it  is  the  only  route  that  takes  us 
through,  cost,  again,  is  not  the  determining  motive — espe- 
cially as  the  whole  trip  is  made  at  the  least  possible  cost. 
Tiie  satisfaction  of  the  desire  can  only  thus  be  obtained. 


CHAPTER  X. 

A    STILL   FUKTHER  ANALYSIS "  THE  POLITICAL   QUESTION" 

"the   rOPULAE   QUESTION." 

We  Lave  shown  satisfactory  reasons  for  l)elieving  that 
the  greatest  annual  product  of  the  industry  of  the  people 
of  the  United  States,  as  a  whole,  can  be  achieved  under 
the  subjection  of  our  o^vn  natural  resources  to  the  opera- 
tion of  our  own  productive  forces.  Ko  feasible  scheme  of 
entering  upon  all  the  industries  natural  to  us  has  ever  been 
indicated,  except  by  restrictions  imposed  upon  the  foreign 
producer  against  his  invading  our  domestic  market  with  like 
commodities.  For  shortness,  we  call  this  scheme  protec- 
tion. Does  a  protective  tariff — imposts  levied  for  the  sake 
of  protection — bring  about  an  unequal  distribution  of  the 
rewards  of  our  industry  ?  As  the  total  annual  product  of 
the  industry  and  services  of  us  all  is  finally  distributed  in 
wages,  rent  and  interest  to  the  owners  of  labor,  land,  and 
capital,  does  a  protective  tariff  result  in  an  unjust  and  in- 
equitable division  of  the  recompense  among  these  three 
great  factors  of  production  ?  Or,  to  adopt  the  questions 
framed  by  Prof.  Sumner,  pregnant  with  his  prejudgment, 
the  inquiries  may  be  thus  stated  : 

"  The  political  question  about  protection  is :  Does  the 
statute  enacted  by  the  legislature  alter  the  distribution  of 
property  so  that  one  man  enjoys  another  marl's  earnings  ? 
Has  the  State  a  law  in  operation  which  enables  one  citizen 
to  collect  taxes  of  another  f 


214:  PEOTECTIOX    VS.  FREE  TRADE. 

"The  popular  question  about  protection  is,  Does  it 
prevent  me  from  supporting  myself  and  my  family  by 
my  labor  as  well  as  I  could  if  there  were  no  protective 
taxes  ?  " 

Of  course,  every  free-trade  professor,  every  free-trade 
scribbler  in  the  reviews,  every  free-trade  speaker  on  the 
stump,  and  every  free-trade  statesman  from  his  seat  in 
Congress,  triumphantly  answers  these  questions  affirma- 
tively. He  says  "  Yes,"  and  complacently  goes  his  way 
as  if  he  had  got  to  the  bottom  of  the  problem. 

Let  us  start  with  a  supposition,  which,  in  fact,  is  not 
all  a  supposition.  Let  us  assume  that  the  55,000,000  peo- 
ple in  the  United  States,  and  the  lands  and  minerals  of  the 
nation,  were  the  only  people  and  the  only  lands  on  the 
earth.  Let  us  suppose  these  people  to  have  discovered 
mutual  wants  to  the  aggregate  of  $10,000,000,000  annually, 
which  is  the  fact.  Let  us  suppose  that  they  think  it  worth 
the  while  to  go  to  the  cost  of  supplying  those  wants  by  the 
exchange  of  services  in  procuring  food,  clothing,  shelter, 
transportation,  education,  and  religious  apphances,  indulg- 
ence in  amusements,  luxuries,  and  vices,  just  as  we  do 
think  it  worth  while.  Let  us  suppose  that,  having  reached 
a  certain  stage  of  civilization,  we  think  it  worth  while  to 
tax  ourselves  with  the  physical  and  mental  efforts  neces- 
sary to  satisfy  our  desires,  which  is  just  the  tax  we  now  do 
impose  on  ourselves.  It  is  manifest  that,  under  the  opera- 
tion of  economic  laws  in  this  community,  services  would . 
be  exchanged  as  nearly  as  possible  in  a  human  society 
under  the  laws  of  demand  and  supply.  Each  laborer,  each 
land-owner,  each  capitalist,  would  receive  his  true  and  ex- 
act proportion  of  the  total  annual  product.  So  far  as  the 
operation  of  economic  laws,  scientific  laws,  were  concerned, 
no  "  one  man  would  enjoy  another  man's  earnings,"  "  no 
one  citizen  could  collect  taxes  of  another."     Skill,  efficien- 


A  STILL   FURTHER   ANiJiYSIS.  215 

cy,  industry,  tlirift,  intelligence,  integrity,  and  persistence, 
would  be  in  full  exercise  and  receive  just  remuneration. 
All  would  be  natural,  straightforward,  and  equitable.  Mo- 
nopoly could  not  exist ;  a  monopoly  would  be  impossible 
in  any  business  open  to  the  competition  of  all  the  labor 
and  capital  of  55,000,000  people.  If  anything  is  settled 
in,  around,  or  about  the  science  of  political  economy,  and 
is  patent  to  observation,  it  is  this,  "  that  no  industry  can' 
for  any  length  of  time  obtain  a  higher  rate  of  profit  than 
that  which  is  common  in  the  community."  And  if  mo- 
nopolies did  grow  up,  they  would  be  domestic  monopolies, 
subject  to  the  regulative  control  of  our  own  legislation, 
and  not  foreign  monopolies  against  which  we  should  be 
without  remedy.  The  power  of  capital  to  grow  and  ac- 
cumulate inheres  in  its  nature,  and  is  not  a  question  of 
geography,  or  free  trade,  or  protection.^  So  far  as  the  sci- 
ence of  political  economy  is  able  to  predict  anything,  it 
would  declare  that  in  this  community,  so  circumstanced, 
each  member  would  take  out  of  the  annual  products  all 
which  his  services  entitled  him  to — subject  to  the  contin- 
gencies which  crime  and  accident  impose  on  any  society  of 
human  beings. 

Let  us  now,  after  the  manner  of  the  a  'priori  econo- 
mists, introduce  the  "disturbing  elements"  of  the  other 

'  Ordinarily  accurate  observation  will  show  that  the  great  fortunes  made 
in  this  country  were  not  made  by  the  organizers  of  the  protected  industries. 
The  average  of  the  profits  in  iron,  steel,  the  textile  fabrics,  and  pottery,  is 
the  one  usual  in  the  country.  Only  when  the  patent  laws  gave  a  monopoly 
of  process  have  there  been  undue  earnings — and  these  conditions  operated 
upon  all  patented  processes,  whether  in  protected  or  non-protected  indus- 
tries. 

The  great  fortunes  of  the  land  have  been  made  by  sagacious  capitalists, 
who  seized  upon  valuable  railroad  routes ;  took  the  ownership  of  large  hold- 
ings of  valuable  mineral  or  timber  lands  ;  discovered  valuable  mines  of  gold, 
silver,  or  copper  ;  or,  more  than  all,  appropriated  the  earnings  of  other  peo- 
ple by  speculation  in  the  grain  and  stock  markets. 


216  PROTi;CTIOX  vs.   FREE  TRADE. 

nations  with  tlieir  industrial  systems.  In  what  way  should 
we,  for  economic  reasons,  permit  it  to  disturb  our  organiza- 
tion of  industries  ?  At  what  point  would  foreign  nations, 
or  any  of  them,  possess  superior  productive  efficiency  ?  In 
soil?  No.  In  skill?  No.  In  industry?  No.  In  ma- 
chinery ?  No.  In  any  natural  gratuity  ?  No,  except  cer- 
tain tropical  fruits.  In  raw  materials?  No.  In  motive 
power  ?  No.  In  "  cost  of  production  "  reckoned  in  actual 
effort  and  sacrifice  ?  No.  In  "  cost  of  production  "  reck- 
oned in  labor  and  abstinence  ?  No.  In  what,  then,  will 
their  "superiority"  consist?  In  "cost  of  production" 
reckoned  in  the  wages  of  labor  and  returns  to  capital. 
With  this  "advantage"  they  can  undersell  us  in  our  ovm 
market,  or  compel  us  to  produce  under  like  rates  of  wages 
of  labor  and  profit  on  capital.  The  disturbance  they  create 
destroys  the  just  and  natural  equilibrium  under  which  we 
had  been  working.  The  American  labor  thus  displaced 
can  find  no  ".something  else"  to  do  here,  and  must  stand 
idle  or  go  to  other  countries.^  This  we  have  abundantly 
seen.  We  now  apply  protection.  It  restores  the  original, 
natural  status  quo.  Everybody  gets  every  commodity  he 
needs  as  cheap  as  the  richest  natural  resources,  the  best  or- 
ganized industry,  and  well-paid  labor  will  permit.  "  Pro- 
tective taxes,"  as  they  are  called,  introduce  no  inequality 
and  work  no  injustice  which  did  not  exist  in  the  isolated 
nation.     The  nation,  as  a  whole,  has  become  evolved  into 

'  "  No  industry  will  ever  be  given  up,  except  in  order  to  take  up  a  better 
one  ;  and  if,  under  free  trade,  any  of  our  industries  should  perish,  it  would 
only  be  because  the  removal  of  restrictions  enabled  some  other  industry  to 
offer  so  much  better  rewards,  that  labor  and  capital  would  seek  the  latter. 
It  is  plain  that,  if  a  man  does  not  know  of  any  better  way  to  earn  his  living 
than  the  one  which  he  is  in,  he  must  remain  in  that,  or  move  to  some  other 
place.'''' — Sumner,  "  Protectionism." 

Yes,  it  is  very  likely  that  free  trade  would  drive  the  capital  and  labor 
out  of  the  country. 


A   STILL  FURTUER  ANALYSIS.  217 

a  liiglily  specialized  organism,  with  differentiated  organs 
and  specialized  functions.  It  costs  more  to  be  a  vertebrate 
than  to  be  a  jelly-fish.  The  nation  must  submit  to  the  tax 
■ — as  the  free-trader  likes  to  play  on  words — of  having 
higher  and  more  numerous  sensations  at  the  cost  of  greater 
expenditure  of  vital  force.  But  the  object  of  all  produc- 
tion is  consumption  ;  the  end  of  all  consumption  is  destruc- 
tion. The  motive  of  all  effort  is  satisfaction  of  desires. 
The  possession  of  these  sensations,  and  the  ability  to  gratify 
them,  has  been  the  object  of  its  struggles,  the  test  of  its 
civilization,  and  end  of  its  existence.  In  the  environment 
in  which  it  found  itself,  and  with  the  capabiUties  locked 
up  in  its  being,  the  jelly-fish  must  perish  as  such  or  j^ass 
into  the  perfected  organism.  The  transformation  doubt- 
less cost  something ;  its  energies  were  taxed  in  the  opera- 
tion.    But  it  "pays"  to  be  a  vertebrate. 

Kow,  to  say  that  in  the  United  States,  grown  into  a 
highly  diversified  organism,  under  the  conditions  of  just 
and  symmetrical  development,  one  part  is  maintained  at 
the  expense  of  another ;  that  "  one  man  enjoys,"  or  can, 
under  any  known  economic  laws,  "  enjoy  another  man's 
earnings,"  is  a  gross  blunder  which  amounts  to  an  absurd- 
ity. The  whole  nation,  socially,  politically,  and  industri- 
ally, is  a  growth.  The  society,  as  an  organized  unit,  dis- 
charges functions  as  a  whole  j  and  these  are  other  than, 
and  in  addition  to,  the  functions  discharged  by  its  several 
parts.  ^    The  anatomist,  by  means  of  the  dissecting-knife,  or 

'  Prof.  Sumner  is  constrained  to  admit  something  like  this :  "  It "  (the 
nation)  "  exists  historically  and  traditionally,  and  as  both  it  is  handed  down 
to  us.  It  is  an  organized  human  society,  whose  limits  are  given  historically, 
and  are  maintained  for  convenience,  because  they  allow  play  to  certain  local 
interests,  prejudices,  traditions,  habits,  and  customs.  Whether  it  is  formed 
by  accident  and  immemorial  tradition,  or  by  colonization  and  legislative  act, 
it  develops  an  organic  life.  The  society,  as  such,  develops  functions." 
("Protection  in  the  United  States,"  p.  10.) 
11 


218  PROTECTION  VS.   FREE  TRADE. 

by  cliemical  analysis,  treats  separately  the  different  organs 
of  the  body,  to  see  their  mechanical  structure,  or  to  learn 
by  observation  what  operations  they  actually  perform.  We 
thus  speak  of  the  gastric  juices,  the  liver,  the  brains,  the 
heart.  Separated  from  the  body,  the  parts  become  mean- 
ingless ;  and,  while  they  continue  to  bear  the  name,  they 
cease  to  be  the  thing  they  were  when  joined  in  the  vital 
processes  of  life,  and  health,  and  growth.  "We  speak  of 
laborers,  capitalists,  landlords,  producers,  and  consumers. 
There  are  no  such  people  detached  from  society. 

In  a  proper  environment,  no  one  part  of  a  true  organ- 
ism grows  at  the  expense  of  another  part.  The  liver  can 
not  complain  that  it  would  have  less  work  to  do  if  the 
stomach  did  not  tax  it,  nor  could  the  brain  exclaim  that  its 
efficiency  is  reduced  by  the  necessity  of  sharing  nutrition 
and  nerve-force  with  the  stomach,  nor  the  stomach  rebel 
and  set  up  for  itself,  because  it  was  compelled  "  to  share 
its  abundance"  with  the  heart  and  the  vascular  system. 
All  such  attempted  treatment  of  the  separate  parts  of  a 
distinct  organism  is  not  only  negatively  useless,  but  is  posi- 
tively vicious,  in  suggesting  error,  and  leads  to  conclusions 
which  must  be  undone  and  corrected.  We  fail  to  identify 
the  real  organism  we  have  in  hand,  and  we  undertake  to 
deal  with  the  parts  as  if  they  were  new  wholes. 

If  the  United  States,  under  the  supposition  we  have 
made,  would  have  grown  up  into  an  orderly,  symmetrical 
system,  with  co-ordinated  stnicture  and  balanced  functions, 
as  must  have  been  the  case,  then  there  is  demonstrably 
nothing  in  the  foreign  environment  which  must  necessarily 
have  changed  it.  We  have,  by  restrictions  on  foreign 
trade,  preserved  our  original  and  natural  condition.  We 
are,  at  least,  no  worse  off  than  if  our  territory  constituted 
the  planet,  and  we  had  it  all  to  ourselves.  Under  such  a 
form  of  growth,  to  talk  about  protection — under  which  we 


A  STILL   FURTDER  ANALYSIS.  219 

preserved  this  status — as  altering  tlie  distribution  of  prop- 
erty so  tliat  one  man  enjoys  another  man's  earnings,  or  as 
enabling  one  citizen  to  collect  taxes  of  another,  is  a  fallacy 
of  the  same  kind  as  tlie  idiotic  system  of  accounts  in  which 
the  brain  should  be  charged  with  the  earnings  of  the  stom- 
ach, or  the  nervous  system  be  treated  as  collecting  a  tax  on 
the  digestive  organs.  Unquestionably  protection,  as  against 
free  trade,  altered  the  distribution  and  consumjDtion  of 
property;  that  is,  we  produced  and  consumed  different 
kinds  of  commodities  in  a  greater  variety,  and  in  different 
proportions ;  but  that  had  no  effect  to  transfer  one  man's 
earnings  to  another.  It  did  not  repeal  or  suspend  the  great 
overmastering  law  of  competition. 

Let  us  see  about  these  first  beginnings.  The  nation,  if 
industrially  fitted  to  exist,  must  be  self-supporting.  In  the 
providence  of  God,  populations  have  settled  upon  the  dis- 
tricts of  the  habitable  earth  where  they  could  live.  The 
great  migrations  which  have  swept  its  surface  from  time 
to  time  have  come  to  stay  and  not  turn  their  faces  back- 
ward. In  some  cases  they  have  moved  in  a  measured,  or- 
derly way,  as  the  resources  of  field  and  forest  and  seas  in- 
vited ;  in  many  instances,  by  great  floods  of  conquest,  as 
of  the  Huns  and  Yandals  into  southern  Europe.  And  last 
came  the  European  overflow  into  America — an  overflow 
great  enough  even  to  relieve  the  workshops  of  England 
and  Germany  and  give  those  who  remained  behind  a  new 
chance  in  the  race  for  life — an  overflow  inspired  as  much 
by  moral  and  political  considerations  as  by  motives  ter- 
minating in  mere  bread  and  butter.  Food  was  a  primary 
want,  but  neither  the  natives  nor  these  immigrants  were 
all  stomach,  as  is  the  jelly-fish  which  lives  on  sea-water. 
They  not  only  had  all  the  rudimentary  organs  of  verte- 
brates, they  were  fully  developed  mammals.  The  demands 
of  their  stomachs  were  readily  supplied.    How  should  they 


220  PROTECTION  VS.   FREE  TRADE. 

go  about  to  supply  the  demands  of  their  hauds,  their  eyes, 
tlieir  hearts,  and  their  souls — the  aggregate  of  sensations 
which  constitute  the  pride  of  life — the  real  ends  of  exist- 
ence ?  With  the  mere  cravings  of  hunger  appeased,  were 
they  now  to  sit  down  and  estimate  the  relative  profitable- 
ness, dignity,  and  importance  of  the  functions  of  the  farm- 
er, the  blacksmith,  the  carpenter,  the  mason,  and  the 
trader  ?  Was  there  any  right  of  priority  in  the  order  in 
which  these  classes  were  entitled  to  have  their  wants  sup- 
plied ?  Any  warrant  for  either  class  to  say  to  the  others : 
"  I  supply  my  wants  here  at  a  certain  rate  of  effort,  and 
can  supply  them  at  less  effort  if  you  will  stay  in  Europe 
and  work  for  me  on  European  terms  and  not  set  yourself 
down  here  by  my  side.  I  am  in  possession  of  a  fertile  soil 
which  gives  me  a  great  advantage  over  a  farmer  in  Europe. 
If  you  accompany  me  and  open  your  shop  or  your  factory 
alongside  of  me,  my  very  advantage  operates  as  a  premium 
against  the  pursuit  of  your  calling,  and  unless  I  pay  you 
more  than  I  ought  to,  you  will  abandon  your  craft  and 
pursue  my  industry.  If  you  are  here,  you  will  want  the 
same  wages,  the  same  returns  for  your  labor  which  I  re- 
ceive from  my  land.  To  me,  yaur  industry  is  an  unprofit- 
able one — it  doesn't  pay  me  to  have  you  make  things  in 
America  which  I  can  get  done  cheaper  in  Europe  "  %  This 
is  the  line  of  argument  which  the  free-trader  puts  into  the 
mouth  of  the  owner  of  the  soil.  If  there  is  any  set  of 
theorems  in  morals  or  pohtics  or  political  economy  by 
which  the  owner  of  the  soil  can  thus  claim  priority  of 
right,  there  is  an  end  of  the  case.  The  implication  is  that 
no  handicraftsman  or  laborer,  in  any  calling,  which  the 
land-owner  is  not  compelled  to  have  alongside  of  him,  has 
any  right,  as  an  independent  freeman,  or  as  an  individual 
soul,  to  be  admitted  as  a  member  of  that  society,  or  to  par- 
ticipate in  the  abundance  of  the  fruits  of  the  soil.     And 


A   STILL   FURTHER  ANALYSIS.  221 

then  lie  crowns  liis  absurdity  by  inviting  liim  to  "  take  to 
the  land  "  and  assist  him  to  increase  that  abundance  to  the 
point  of  valuelessness.  Because,  as  ovvner  of  the  soil,  he 
has  become  the  jiroprietor  of  all  the  most  advantageous 
instruments  of  production,  he  warns  off  all  new-comers, 
whether  l)y  birth  or  immigration,  as  trespassers.  Their 
continued  residence  with  him  compels  him  to  share  the 
advantages  of  natural  resources,  whereas  otherwise  he  might 
appropriate  them  all.  So  long  as  the  land  remains  open, 
they  all  turn  in  on  the  land  industries.  Food  is  plenty 
enough,  but  they  can  not  sell  enough  of  it  to  foreign  na- 
tions, three  thousand  miles  away,  to  buy,  with  its  proceeds, 
all  the  clothing  and  carpets  and  blankets  and  cutlery  and 
chains  and  axes  and  anchors  which  their  abundance  sug- 
gests or  their  further  conquest  of  the  fields,  forests,  mines, 
and  seas  constantly  tempts  them  to  make  or  buy.  So 
things  happen  exactly  as  they  did  in  1783-1789,  and  from 
1789  to  this  hour.  The  purchasing  powers  of  these  "  ad- 
vantageous industries  "  failed — it  was  as  if  they  were  in 
possession  of  no  natural  resources.  This  early  discovery  of 
a  want  of  vent  for  their  raw  materials  was  no  ambitious  con- 
ceit or  self-imposed  delusion.  The  discovery  was  made  at 
the  cost  of  a  bitter  and  well-nigh  fatal  experience — so  bitter 
that  it  threatened  to  ingulf  all  the  results  of  seven  years' 
war.  England  dumped  cargo  after  cargo  of  just  the  goods 
the  people  needed,  and  they  were  cheap.  The  crisis  of 
free-trade  prosperity  was  reached,  and  we  "  were  flooded 
with  cheap  foreign  goods."  England  did  not  want  our 
kind  of  "  cheap  products,"  and  we  were  unable  to  flood 
them  in  return,  and  the  colonists  paid  the  balance  against 
us,  more  than  $20,000,000,  in  coin.  Notwithstanding  that 
Adam  Smith  had  just  demonstrated  the  fallacy  of  the 
"  mercantile  system,"  and  that  "  wealth "  did  not  consist 
of  silver  and  gold,  but  of  "commodities,"  the    country 


222  rROTECTIOX  vs.   FEEE  TRADE. 

was  bankrupted.  Sedition  and  rebellion  rose  against  con- 
stituted authority  in  all  tlie  colonies.  Insolvency  and  dis- 
tress pervaded  all  occupations  and  all  communities.  The 
nation  has  never  forgotten  the  crisis,  and  never  ought  to,  as 
it  never  will.  It  was  a  powerful  motive  which  could  drive 
them  from  the  natural,  peaceful,  profitable  industry  of 
agriculture.  And  yet  Prof.  Perry  has  said  of  this  epoch  : 
"  JSTo  ill  effects  followed  this  general  liberty  to  buy  and  sell 
with  foreigners."  ^ 

As  "  the  proof  "  of  this  page  is  being  read,  there  has  been  placed  in  my 
hands  Part  I  of  a  most  admirable  "  Short  Tariff  History  of  the  United 
States,"  by  Mr.  David  H.  Mason,  of  Chicago.  He  has  portrayed  by  the  clear- 
est historical  data  the  causes  and  consequences  of  the  hard  times  suffered  by 
the  American  people  from  I'ZSS  to  1789.  He  has  made  good  his  claim  "to 
have  dug  down  to  the  original  protecting  power  through  nearly  a  century  of 
eruptive  overflow  from  the  volcanic  discussions  of  the  tariff  question,  and  to 
have  laid  bare  the  distinct  outlines  of  that  buried  and  forgotten  Herculaneum 
of  the  Constitution,  which  was  as  familiar  as  their  own  door-steps  to  the  first 
generation  of  American  statesmen."  We  make  two  or  three  citations  out  of 
the  hundred  with  which  Mr.  Mason  fortifies  his  conclusions. 

From  Marshall's  "  Life  of  Washington  " :  "  On  opening  their  ports,  an  im- 
mense quantity  of  foreign  merchandise  was  introduced  into  the  country,  and 
they  were  tempted,  by  (he  sudden  cheapness  of  imported  goods,  and  by  their 
own  wants,  to  purchase  beyond  their  capacities  for  payment.  Into  this  indis- 
cretion they  were  in  some  measure  beguiled  by  their  own  sanguine  calcula- 
tions on  the  value  which  a  free  trade  would  bestow  on  the  produce  of  their 
soil,  and  by  a  reliance  on  those  evidences  of  the  public  debt  which  were  in 
the  hands  of  most  of  them.  So  extravagantly,  too,  did  many  estimate  the 
temptation  which  equal  liberty  and  vacant  lands  would  hold  out  to  emigrants 
from  the  Old  World,  as  to  entertain  the  opinion  that  Europe  was  about  to 
empty  itself  into  America,  and  that  the  United  States  would  derive  from  that 
source  such  an  increase  of  population  as  would  enhance  their  lands  to  a  price 
heretofore  not  even  conjectured." 

From  Bancroft's  "  History  of  the  Formation  of  the  Constitution,"  Appen- 
dix :  "  There  is  no  trade  with  any  but  the  British,  who  alone  give  the  credit 
they  want  and  draw  off  all  the  bullion  they  can  collect.  They  see  no  prospect 
of  clothing  themselves,  unless  they  have  the  circuitous  commerce  they  for- 
merly enjoyed  with  Great  Britain,  which  many  think  a  vain  expectation,  now 
that  they  are  no  part  of  the  empire.    The  scarcity  of  money  makes  the  prod- 


A  STILL  FURTDER  ANALYSIS.  223 

Prof.  Sumner  ("  Protection  in  the  United  States  ")  en- 
deavors to  shift  the  troubles  to  "  currency  errors."  Doubt- 
less, but  as  effect,  not  cause.  He  can  not  conceal  the  real 
causes  and  effects.     He  says :  "  The  States,  however,  still 

uce  of  the  country  cheap,  to  the  disappointment  of  the  farmers  and  the  dis- 
couragement of  husbandry.  Thus  the  two  classes  of  merchants  and  farmers, 
that  nearly  divide  all  America,  are  discontented  and  distressed.  Some  great 
change  is  approacliing."     (1785.) 

From  Ilildreth's  "  History  of  the  United  States  " :  "  The  farmers  no  longer 
found  that  market  for  their  produce  which  the  French,  American,  and  British 
armies  had  furnished.  The  large  importation  of  foreign  goods,  subject  to 
little  or  no  duty  and  sold  at  peace  prices,  was  proving  ruinous  to  all  the  do- 
mestic manufactures  and  mechanical  employments  which  the  non-consump- 
tion agreements  and  the  war  had  created  and  fostered.  Immediately  after 
the  peace,  the  country  had  been  flooded  with  imported  goods,  and  debts  had 
been  unwarily  contracted  for  whiclkthere  was  no  means  to  pay.  The  imports 
from  Great  Britain  in  the  years  1784  and  1785  had  amounted  in  value  to 
thirty  millions  of  dollars,  while  the  exports  thither  had  not  exceeded  nine 
millions.  .  .  .  The  excessive  importation  of  foreign  goods  had  drained  the 
country  of  specie.  The  excessive  importation  of  foreign  goods,  and  the  con- 
sequent pressure  upon  domestic  manufactures,  had  diminished  a  good  deal 
of  the  old  prejudice  against  customs  duties.  A  party  had  sprung  up  in  favor 
of  raising  a  large  part  of  the  public  revenue  in  that  way.  .  .  .  This,  however, 
was  opposed  by  the  merchants  as  injurious  to  their  interests.  They  came 
forward  as  the  champions  of  free  trade,  and  insisted  upon  the  old  system  of 
direct  taxation." 

Minot,  "  History  of  the  Insurrections  in  Massachusetts  " :  "  Thus  was  the 
usual  means  of  remittance  by  articles  of  the  growth  of  the  country  almost 
annihilated,  and  little  else  than  specie  remained  to  answer  the  demands  in- 
curred by  importations.  The  money,  of  course,  was  drawn  off,  and  this  being 
inadequate  to  the  purpose  of  discharging  the  whole  amount  of  foreign  con- 
tracts, the  residue  was  chiefly  sunk  by  the  bankruptcies  of  the  importers." 

Mr.  Mason  has  produced  the  most  abundant  authority  for  his  own  digest 
of  the  facts  of  this  era,  which  is  in  the  words  following :  "  Such  were  through- 
out the  Confederation,  and  such  have  always  been  in  other  countries,  the 
results  of  free-trade  principles  in  the  culminating  stages  of  their  operation. 
Step  by  step  the  movement  of  the  country  was  constantly  retrograde,  pro- 
ceeding through  variously  excessive  importations  to  a  pinching  shrinkage  of 
home  industry  and  of  employment  for  domestic  labor,  then  to  an  exhaustive 
draining  away  of  specie,  until  the  people  were  almost  entirely  without  a  cir- 


224  PROTECTION    VS.   FREE  TRADE. 

liad  vast  quantities  of  paper  afloat.  As  soon  as  the  war 
ended,  this  specie  was  all  exported  and  expended  in  the 
purchase  of  goods  long  missed.  The  export  of  specie  in 
17S3  was  ten  millions.  .  .  .  This  explains  why  the  Eng- 
lish were  so  well  satisfied  with  the  revival  of  trade.  .  .  . 
During  the  war  many  industries  had  sprung  up  to  supply 
the  wants  of  the  people  for  manufactures  formerly  im- 
ported. Whatever  may  have  been  the  effect  of  peace  to 
destroy  the  war  mushrooms,  we  find  that  there  were  in 
1784  manufactures  of  iron,  glass,  paper,  and  cloth  here. 
.  .  .  And  j)ropositions  were  made  by  competent  capitalists 
for  mining  iron  on  a  large  scale  in  Pennsylvania,  which 
fell  only  on  account  of  the  turbulency  of  the  inhabitants 

culating  medium  ;  then  to  sore  and  exasperating  distress  for  lack  of  money, 
and  to  unendurable  pressure  in  the  relation  of  debtor  and  creditor,  with 
widely  extended  impoverishment;  then  to  resentful  discontent,  weakened 
respect  for  the  law  and  its  tribunals,  decay  of  allegiance,  loss  of  confidence 
between  man  and  man,  and  an  unloosening  of  societary  ties ;  then  to  turbu- 
lence, open  antagonism  to  the  constituted  authorities,  insurrectionary  com- 
motions, and  an  appeal  to  armies  in  search  of  unattained  redress.  Had  there 
been  no  free  trade,  there  would  have  been  no  inundation  of  foreign  goods ; 
had  there  been  no  inundation  of  foreign  goods,  there  would  have  been  no 
distress  for  lack  of  circulating  medium ;  had  there  been  no  such  distress, 
there  would  have  been  no  impulse  toward  insubordination  to  the  State.  The 
starting-point  was  free  trade ;  the  outcome  was  rebellion  and  an  imperious 
necessity  to  resort  for  deliverance  to  the  protective  system.  As  this  was  the 
closest  approach  to  absolute  free  trade  ever  tried  by  this  country,  so  there 
was  the  largest  harvest  of  calamities  and  dangers  ever  experienced  by  tha 
American  people.  That  awful  crisis,  at  the  outset  of  our  career  as  an  inde- 
pendent nation,  should  be  regarded  as  a  monument  erected  by  the  sufferings 
of  our  forefathers  to  warn  posterity  against  the  delusive  and  mischievous 
plausibilities  of  the  free -trade  policy.  Nor  is  it  now  less  needful  to  ponder 
those  solemn  teachings  of  our  history,  when  Peter-the-Hermit  doctrinaires^ 
emerging  from  their  retirement  amid  theoretic  book-lore,  are  organizing  a 
crusade  to  recover  the  desolate  and  accursed  Jerusalem  of  unrestricted  com- 
merce. The  sorrows  drunk  by  our  Revolutionary  sires  to  the  very  dregs, 
under  that  system,  should  be  to  all  following  generations  what  the  red  signal- 
light  is  to  a  place  of  peril." 


A  STILL  FUETHER  ANALYSIS.  225 

and  the  insecurity  of  titles  (!)  .  .  .  Meanwhile  tlie  Govern- 
ment of  the  Confederation  was  falhng  to  pieces,  and  was  a 
pity  and  a  laughing-stock.  .  .  .  Misery  was  great  through- 
out the  country,  owing  to  paper  money  and  debt,  and  the 
losses  of  the  war.  The  people  were  discontented  and  re- 
bellious." O^^^y  should  they  be?  They  were  "flooded 
with  cheap  foreign  goods."  Why  did  they  not  flood  back 
foreign  nations  with  their  own  abundance  of  cheap  food 
and  raw  materials  ?  The  truth  was,  the  whole  societary 
movement  was  arrested  by  the  export  of  all  their  coin  to 
pay  their  debts  contracted  for  foreign  goods.)  ..."  The 
question  of  import  tax  was,  therefore,  bound  up  with  the 
question  of  civil  order,  protection  to  manufactures,  foreign 
commercial  relations,  and  the  misery  aiising  from  bad  cur- 
rency at  home.  This  led  to  the  Congress  of  Annapolis  in 
1T8G,  ichich  loas  only  a  commercial  convention,  and  which 
found  no  better  way  to  discharge  the  task  it  had  under- 
taken than  to  recommend  Congress  to  call  another  con- 
vention in  the  following  year  to  revise  the  Articles  of 
Confederation,  that  is,  to  provide  for  a  common  revenue 
system  and  for  'the  regulation  of  commerce,'  by  giving 
the  General  Government  permanent  power  for  those  pur- 
poses." 

It  is  not  too  much  to  conclude  that  the  present  Consti- 
tution grew  out  of  the  free-trade  crisis  under  the  Confed- 
eration. This  was  then  the  work  of  men  who  were  look- 
ing upon  the  inmost  nature  of  trade — at  the  very  genesis 
of  our  commerce.  It  is  no  longer  the  mere  power  "  to  col- 
lect taxes,"  "  to  lay  import  duties  "  for  revenue  "  only,"  or 
"for  public  purposes  exclusively,"  but  the  true  vital  or- 
ganic act  of  "  regulating  commerce." 

The  agriculturist,  who,  as  possessor  of  the  soil,  furnished 
the  exportables  of  those  days,  allowed  the  artisans  who  made 
his  houses  and  bams,  and  repaired  his  clothes  and  shoes,  to 


226  PEOTECTION    VS.   FREE  TRADE. 

remain  alongside  of  liim  at  a  higli  rate  of  wages,  and  ac- 
cepted the  reduced  average  returns  of  their  joint  industry. 
The  farmer  was  compelled  to  submit  to  the  tax  of  having 
houses,  and  barns,  and  wells,  and  harness,  and  the  like. 
This  was  imposed  on  him  by  the  nature  of  things — just  as 
he  is  compelled  to  submit  to  the  tax  of  a  short  crop,  or  the 
seed  he  sows — or  the  tax  of  a  glut  in  the  European  market. 
The  farmer  himself  would  not  either  in  178-i  or  1884  have 
thought  of  these  results,  in  which  the  efficiency  of  his  labor 
was  reduced  by  the  necessary  cost  of  hving,  as  a  tax,  but 
that  is  the  way  in  which  free-trade  professors  and  stump- 
speakers  in  Congress  put  it  in  later  days.  It  is  the  modern 
trick-word.  His  free-trade  patronizer  would  persuade  the 
American  farmer  that  any  commodity  made  here,  when  it 
might  be  made  cheaper  abroad,  is  made  at  his  loss,  and  he 
is  taxed  to  enable  our  artisans  "  to  engage  in  a  losing  busi- 
ness." ^ 

'  Mr.  Henry  J.  Pliilpot,  representing  the  Iowa  State  Free-Trade  League, 
addressed  the  Tariff  Commission.  ("Report,"  vol.  i,  p.  110,  etc.)  The  bu- 
colic exegesis  of  this  gentleman  is  one  of  the  curiosities  of  economic  litera- 
ture. His  whole  address  will  be  found  entertaining,  if  not  instructive — not 
for  his  logic,  which  is  neither  better  nor  worse  than  that  of  his  more  skillful 
coadjutors,  the  Professors — but  for  a  certain  exuberance  of  rhetoric  under 
which  he  conceals  his  argument.  He  claims  the  credit  of  forbearance  that 
certain  classes  of  mechanics  are  allowed  to  live  here  and  work  without  the 
aid  of  protection — ^that  they  are  permitted  to  earn  wages  in  certain  callings. 
"  I  never  knew  a  farmer  who  got  his  horse  shod  in  England,  or  who  had  his 
house  built  there,  or  had  it  plastered  or  glazed  there,  or  had  his  cellar  dug 
there,  or  his  cistern  walled,  or  his  well.  I  therefore  consider  that  those 
classes  of  occupations  can  not  possibly  be  protected  by  the  tariff;  that  we 
would  still  need  the  wells  without  the  tariff,  still  be  compelled  to  get  them 
dug  as  well  as  our  cisterns  and  our  cellars,  and  that  we  could  not  get  it  done 
abroad." 

So  that,  logically,  the  only  reason  for  having  houses  built  and  cellars  dug 
and  horses  shod  by  American  workmen  is  because  the  American  food-raiser 
is  compelled  to  live  under  such  a  dispensation.  These  are  faxes  which  he 
does  not  see  how  to  escape.     They  had  to  pay  their  neighbors  to  engage  in 


A  STILL   FURTEER  ANALYSIS.  227 

The  fanners,  in  common  with,  their  fellow-citizens,  need 
more  than  food  and  houses  and  cellars  and  cisterns.  They 
need  a  given  amonnt  of  iron,  and  the  various  tools  and  im- 
plements made  of  it,  and  cotton  and  woolen  fabrics.  These 
can  be  produced  at  home,  or  else  the  glowing  inventories 
of  our  resources  which  free-traders  always  feel  bound  to 
offer  us  are  a  fraud. ^ 

The  yearly  labor  of  the  people  working  under  just  and 
tolerable  conditions  of  competition  will  produce  the  yearly 

a  losing  business  to  themselves — losing,  because,  if  they  could  have  imported 
houses  and  cisterns  and  cellars  made  cheaper  abroad,  it  looks  as  if  they 
would  have  been  gainers. 

Undoubtedly  some  kind  of  body  politic  might  be  built  up  under  the  au- 
spices of  the  Iowa  State  Free-Trade  League.  Poland,  Turkey,  Ireland,  Brazil 
and  Egypt  are  examples.  Patagonians  and  Esquimaux  come  still  nearer  the 
tj-pe  in  which  the  exertions  to  maintain  life  are  freed  from  such  taxes.  They 
are  organisms  with  a  single  organ  and  a  single  function — the  food-raiser — 
and  they  are  almost  exempt  from  the  taxes  which  the  tailor,  the  shoemaker, 
the  school-teacher,  the  minister,  and  the  doctor  impose  on  men — they  do  not 
need  them. 

'  Here  is  one  from  our  bucolic  friend  of  the  Iowa  State  Free-Trade 
League:  "But  I  think  the  sublimest  cheat  on  record  is  the  man  who  tries 
to  cheat  God  Almighty  out  of  the  credit  of  making  this  a  good  country  to 
live  in,  and  who  pretends  that  what  God  has  done  in  the  way  of  piling  up 
mountains  of  iron,  silver,  and  gold,  filling  the  bowels  of  the  earth  with  salt, 
copper,  coal,  and  petroleum,  and  covering  its  surface  for  centuries  with  rich 
vegetable  mold,  and  watering  it  with  mighty  lakes  and  rivers,  and  planting 
boundless  forests — that  all  this  would  do  the  farmer  and  the  working-man  no 
good  unless  they  were  taxed  with  a  tax  such  as  no  other  people  ever  submit- 
ted to.     I  think  brass  ought  to  be  placed  on  the  free  list." 

Well,  scarcely,  while  domestic  supplies  of  this  richness  and  purity  hold 
out. 

Does  the  author  of  this  declamation  conceive  that  this  iron  and  coal  will 
forge  themselves  into  bars  and  rails  and  nails  and  machinery  without  the  in- 
tervention of  the  American  laborer  ?  Or  can  he,  while  his  constituents  kick 
their  heels  into  the  counter  of  some  store  at  the  Iowa  Cross-roads,  devise  a 
plan  by  which  he  can  buy  the  bars  and  rails  and  nails  and  machinery  in 
England  with  the  Iowa  corn  which  is  consumed  as  fuel  in  the  very  stove 
which  is  warminjc  them  ? 


22S  PROTECTION  VS.   FKEE  TEADE. 

supply  of  all  oiir  wants,  including  our  need  of  iron  and 
textile  fabrics,  and  add  a  thousand  millions  annually  to 
onr  capital.  The  total  product  will  be  distributed  ne- 
cessarily and  equitably  in  rent,  wages,  and  profits.  The 
farmer  takes  his  share  as  laud- owner  and  toiler;  the  work- 
man takes  his  share  as  laborer  for  wages;  the  professor 
takes  his  share  as  the  earner  of  his  salary;  the  capitalist 
takes  his  share  for  interest  and  risk  ;  and  the  entrepreneur 
takes  his  share  as  the  wages  of  superintendence.  Each 
takes  all  the  share  which  the  economic  law  of  the  society 
permits.  The  statute  law  makes  no  interference.  The 
legislature  stands  neutral,  with  hands  ofiE.  Producers  are 
remanded  to  the  law  which  the  Almighty  has  imposed  on 
the  societary  movement.  The  products  and  services  of 
each  in  market  are  a  market  for  the  products  and  services 
of  all.  1^0  one  of  the  members  of  this  industrial  entity — 
this  organism — had  any  possibility  of  increased  earnings, 
or  of  making  a  product  with  a  higher  exchange  value,  out 
of  which  he  has  contributed  or  could  contribute  to  "  the 
protected  industries."  The  fai'mer,  for  instance,  put  into 
his  pocket  all  there  was  in  the  case  for  himself.  Nobody 
has  taxed  him — nobody  collects  taxes  of  him — there  is  no 
taxation  except  the  cost  of  satisfying  the  desires  which  he 
thinks  it  worth  while  to  satisfy,  and  no  mode  has  ever  been 
pointed  out  in  which  he  could  satisfy  them  at  less  effort. 
Nobody  has  "  robbed  "  him.  Who  has  robbed  him  %  The 
"  protected  industries  "  ?  They  are  an  abstraction.  Cer- 
tain laborers  in  these  protected  industries  earned  wages 
vv'hich  they  ex]3ended  in  food,  and  clothes,  and  shelter,  and 
the  education  of  their  children.  Certain  capitahsts  in  the 
protected  industries  got  their  profits,  which  again  got  dis- 
tributed principally  to  lal)or,  in  new  tools,  new  houses,  new 
family  wants.  Their  profits  were  only  such  as  were  usual 
in  the  country.     Certain  organizers  got  the  wages  of  man- 


A   STILL   FURTHER   ANALYSIS.  229 

agement.  These  wages  were  only  such  as  other  persons,  in 
Europe  or  America,  in  possession  of  equal  skill  and  execu- 
tive powers,  can  earn.^ 

Certain  landlords  received  rent,  which  again  is  subject 
to  the  law  of  supply  and  demand.  The  fulcrum  upon 
which  the  whole  industrial  supersti*uctm'e  was  raised  is  tlie 
total  of  our  resources  and  aptitudes,  and  no  one  has  been 
raised  at  the  depression  of  another.  The  point  of  reaction 
is  not  on  one  man  or  one  group,  but  upon  all. 

And  of  the  sums  which  went  to  capitalists  and  super- 
intendents and  landlords,  the  greater,  by  far  the  greater 
portion,  went  at  the  last  into  the  hands  of  laborers  in 
other  departments,  who  were  building  houses,  papering, 
painting,  plumbing,  making  new  stone  foundations,  and 
erecting  new  brick  walls,  and  making  new  carriages  and 
harness,  and  so  forth,  and  so  forth,  new  things,  and  render- 

'  To  those  who  so  flippantly  discourse  of  "  monopolists  "  and  "  robbers  " 
in  aid  of  free  trade  I  commend  these  words,  by  the  author  of  "  What  Social 
Classes  owe  to  each  other."  Jlost  of  these  careless  thinkers  seem  to  have 
no  objections  to  the  rise  and  success  of  great  industrial  establishments,  only 
so  that  they  are  on  foreign  shores  : 

"  The  great  gains  of  a  great  capitalist  in  a  modern  state  must  be  put  un" 
der  the  head  of  wages  of  superintendence.  Any  one  who  believes  that  any 
great  enterprise  of  an  industrial  character  can  be  started  without  labor  must 
have  little  experience  of  life.  Let  any  one  try  to  get  a  railroad  built,  or  to 
start  a  factory  and  win  reputation  for  its  products,  or  to  start  a  school  and 
win  a  reputation  for  it,  or  to  found  a  newspaper  and  make  it  a  success,  or  to 
start  any  other  enterprise,  and  he  will  find  what  obstacles  he  must  overcome, 
what  risks  must  be  taken,  what  perseverance  and  courage  are  required,  what 
foresight  and  sagacity  are  necessary.  Especially  in  a  new  country,  where 
many  tasks  are  waiting,  where  resources  are  strained  to  the  utmost  all  the 
time,  the  judgment,  courage,  and  perseverance  required  to  organize  new  en- 
terprises and  carry  them  to  success  are  sometimes  heroic.  Persons  who  pos- 
sess the  necessary  qualifications  obtain  great  rewards.  They  ought  to  do  so. 
It  is  foolish  to  rail  at  them.  Then,  again,  the  ability  to  organize  and  conduct 
industrial,  commercial,  or  financial  enterprises  is  rare ;  the  great  captains  of 
industry  are  as  rare  as  great  generals.  They  arc  paid  in  proportion  to  the 
supply  and  demand  of  them." 


230  PROTECTION  VS.   FREE  TRADE. 

ing  the  thousand  services  "which  do  not  issue  in  commodi- 
ties. The  whole  fund  returns  to  the  treasury  of  the  society, 
to  be  distributed  over  and  over  again,  as  men  discover  new 
wants  and  find  the  power  to  render  new  services  to  each 
other,  as  members  of  this  industrial  organism,  the  organic 
unit,  this  ensemble. 

All  the  wages  and  all  the  profits  in  the  protected  indus- 
tries are  paid  out  of  the  exchange  values  of  the  products 
of  those  industries.  "What  is  the  gain  to  the  nation,  as  a 
whole  ?  The  whole  value  of  the  articles  produced  by  these 
industries,  or  rather  the  whole  of  the  new  articles  them- 
selves. The  gain  to  the  nation,  then,  is  the  total  price  or 
value  of  the  exports  now  saved,  which  must  otherwise  be 
sent  abroad  to  buy  the  same  products  which  we  could  make 
in  the  protected  industries.  If  a  ton  of  iron  in  England 
cost  fifteen  bushels  of  wheat,  and  costs  twenty  bushels  in 
America,  we  have  not  lost  five  dollars  by  purchasing  it  at 
home,  but  have  gained  the  ton  of  iron.^ 

'  I  am  not  aware  that  any  satisfactory  reply  has  ever  been  made  to  the 
following  argument  of  Sir  Edward  Byles  in  his  "  Sophistries  of  Free  Trade  " : 

"  Suppose  England  to  manufacture  from  English  materials  gloves  to  the 
amount  of  a  million  sterling  a  year. 

"  This  million  sterling  does,  as  we  have  seen,  two  things  :  First,  it  affords 
net  annual  income  to  that  amount,  available  (every  farthing  of  it)  for  the 
support  of  the  population.  Secondly,  this  million  sterling  creates  a  market 
to  that  amount  for  other  English  products.  The  whole  million  is  every  year 
feeding,  clothing,  and  lodging  men,  women,  and  children,  and,  at  the  same 
time,  finding  a  market  for  cottons,  woolens,  hardware,  corn,  timber,  silk. 
AVhen  an  industrious  population  are  employed,  they  not  only  enrich  the  whole 
community  to  the  extent  to  which  they  themselves  are  enriched,  but  by  the 
market  which  their  prosperity  affords  to  other  industries.  When  Manchester 
is  in  full  employment,  what  a  market  does  Manchester  itself  afford,  not  only 
for  other  articles,  but  even  for  its  own  productions  ! 

"  Now  change  the  supposition.  Suppose  that  French  gloves  can  be  im- 
ported cheaper  by  five  per  cent  than  English  gloves  can  be  made.  It  is  the 
immediate  pecuniary  interest  of  all  consumers  to  buy  French  gloves  instead 
of  English  ones,  and  they  will  be  bought  accordingly.    We  will  even  suppose 


A   STILL  FURTHER   ANALYSIS.  231 

It  is  a  tou  of  iron  added  to  the  annual  product  of 
American  industry,  to  be  distributed  to  rent,  wages,  and 
profits.  But,  says  tlie  free-trader,  the  labor  spent  in  pro- 
ducing the  iron  might  have  been  put  upon  some  other  in- 
dustry at  greater  advantage.     We  have  already  seen  that  it 

the  French  Government  to  allow  the  French  gloves  to  be  bought  by  the  very 
same  English  cottons,  woolens,  hardware,  com,  iron,  and  silk  that  bought 
the  English  gloves  before ;  nay,  we  will  go  further,  and  admit  the  extrava- 
gant postulate  that  all  these  English  products  could,  in  exchange  for  the 
French  gloves,  find  as  good  a  market  in  France  as  they  formerly  did  in  Eng- 
land. Now  take  the  account.  Let  us  see  what  individual  glove-consumers 
have  gained,  and  what  the  English  nation  has  lost. 

"  Gloves  have  in  the  aggregate  cost  those  who  wear  them  less  money  than 
before  by  five  per  cent  on  a  million  sterling,  that  is,  by  £50,000.  Glove- 
consumers  have  gained  by  the  change  £50,000  in  one  year.  But  the  nation 
has  lost,  in  the  same  year,  the  million  sterling  which  used  to  maintain  Eng- 
lishmen with  their  wives  and  children.  Englishmen,  as  a  body,  have,  by  the 
change,  lost  a  revenue  of  £950,000  a  year. 

"  But  this  is  only  part  of  the  mischief  ;  for,  though  their  revenue,  their 
subsistence  is  gone,  the  English  men,  women,  and  children  remain,  and  must 
be  supported  by  public  charity. 

"  But  we  have  given  the  free-traders  the  benefit  of  three  suppositions,  no 
one  of  which  is  true.  We  have  conceded,  first,  that  the  French  Government 
would  allow  the  free  import  of  as  much  English  produce  as  would  entirely 
pay  for  the  gloves  ;  we  have  conceded,  secondly,  that  all  this  English  produce 
finds  at  once  as  ready  and  as  good  a  market  as  it  did  at  home ;  we  have  con- 
ceded, lastly,  that  there  will  be  no  exportation  of  the  precious  metals,  de- 
preciating prices,  appreciating  the  currency,  and  augmenting  the  pressure, 
not  only  of  taxes  and  public  burdens,  but  of  all  debts  and  private  obliga- 
tions. 

"  But  if  these  concessions  are  not  true,  then,  in  addition  to  a  million  a 
year  lost  as  revenue,  formerly  supporting  men,  women,  and  children,  you  lost 
a  market  also  for  other  productions  to  the  extent  of  a  million  a  year,  and  are 
subject  to  all  those  numerous  evils  that  afiBlict  industry,  when  there  is  a  tend- 
ency to  the  export  of  the  precious  metals. 

"  Nor  docs  the  mischief  stop  here.  Other  commodities  which  have  lost 
their  market  will  to  that  extent  cease  to  be  produced.  And  by  that  cessa- 
tion not  only  will  the  subsistence  of  the  people  to  that  extent  disappear,  but 
other  markets  will  be  injured,  and  so  the  mischief  will  go  on  and  be  felt 
through  every  grade  of  society  and  in  every  department  of  industry." 


232  PKOTECTION    VS.   FREE  TRADE. 

could  not  have  made  a  product  witli  any  higher  exchange 
value.  We  have  already  conclusively  seen  that  the  trade 
in  a  foreign  market  is  forbidden,  not  by  the  high  rate  of 
wages,  but  for  the  want  of  a  foreign  market  for  the  spe- 
cial product  here  in  which  the  rate  of  wages  is  high.  We 
do  not  know  of  any  "  something  else  "  in  which  the  labor 
could  have  been  employed. 

The  addition  to  the  total  annual  product  of  our  indus- 
try, the  gain  to  the  nation,  is  the  whole  value  of  the  cot- 
ton, tobacco,  wheat,  and  provisions,  which  we  should  have 
been  compelled  to  send  abroad  to  pay  for  the  products  of 
our  protected  industries.  They  remained  here,  and  consti- 
tuted a  demand  for  other  American  labor. 

The  loss  is  the  difference  in  price  between  the  domestic 
and  foreign  commodity,  reckoned  in  present  prices  and  on 
present  exchange  values.  On  no  right  use  of  the  facts  can 
this  loss  be  made  to  equal  any  definite  sum.  Suppose  it 
$100,000,000.  A  loss  of  only  six  per  cent  on  the  value  of 
our  exports  and  an  increase  of  six  per  cent  in  the  cost  of 
imports  alone  would  come  to  $100,000,000.  It  is  as  Kkely 
under  free  trade  to  be  twenty-five  per  cent  each  way.  If, 
now,  the  farmer  says,  I  could  have  bought  more  iron  for  a 
given  number  of  bushels  of  wheat ;  if  the  laboring-man 
says,  I  could  have  bought  more  muslin  and  blankets  and 
dinner-pails  for  a  given  number  of  dollars  received  for 
wages ;  if  the  professor  and  the  capitalist  say  they  could 
have  bought  more  yards  of  fine  English  broadcloth  and 
decorated  china  and  Axminster  carpets  with  their  salaries 
and  dividends — it  is  j^ertinent  to  ask.  What  could  the 
farmer,  the  laboring-man,  the  professor,  and  the  capitalist, 
have  bought  them  with?  Exportables:  what  are  they? 
Cotton,  tobacco,  wheat,  and  provisions ;  these  are  and  have 
been  the  only  purchase-money  we  had  to  offer. 

Assuming,  now,  the  possibility  of  selling  enough  of 


A  STILL  FURTHER  ANALYSIS.  233 

those  abroad  to  buy  the  manufactured  articles  which  we 
consume,  a  moment's  examination  of  the  state  of  the  case 
will  demonstrate  the  ruinous  temis  on  which  we  must  effect 
the  exchange.  Our  farmers  raise  annually,  say,  $3,G00,000,- 
000  worth  of  food  and  raw  materials.  Constituting  some- 
what less  than  half  the  population,  they  themselves  con- 
sume probably  $1,400,000,000  worth.  They  now  export 
$700,000,000  worth,  and  sell  $1,500,000,000  at  home.  We 
now  buy  abroad  $350,000,000  worth  of  goods  like  those 
made  in  the  protected  industries,  and  a  like  amount — $350,- 
000,000 — which  our  climate  is  unfitted  to  produce.  It  is 
notable  that  our  food  exports  do  not  go  to  the  countries 
which  furnish  our  tea,  coffee,  sugar,  wines,  fruits,  and  luxu- 
ries. We  consume  at  a  low  estimate  $2,500,000,000  of 
commodities  made  in  our  own  protected  industries.  These 
We  propose  to  abandon,  and  supply  our  needs  from  abroad. 
Our  demand  for  foreign  manufactured  goods  will  now  sud- 
denly be  increased  to  $2,850,000,000.  Our  surplus  of  raw 
materials  and  food,  increased  by  the  fourth  of  our  people 
released  from  the  protected  industries  and  going  into  agri- 
culture, will  now  be  $1,600,000,000.^  But  the  foreign 
market  has  never  taken  but  $350,000,000  in  exchange  for 
manufactured  commodities.  Into  that  market  you  are  now 
going  to  dump  $1,600,000,000  food-products,  or  five  times 
as  much  as  before,  and  demand  in  return  $2,850,000,000, 
or  seven  times  as  much  as  before.  We  want  and  must 
have  these  goods ;  they  do  not  need,  will  not  take,  ours. 
Even  if  the  trade  could  go  forward  at  all,  it  would  be  at  the 
loss  of  all  exchange  value  and  at  the  collapse  of  all  purchas- 

1  The  $700,000,000  +  §900,000,000,  the  one  fourth  of  83,000,000,000. 
This  fourth  of  the  people  either  will  or  will  not  go  into  agriculture.  If  they 
"  catch  on  "  to  the  scientific  game  of  the  free-trader,  they  will.  If  they  do 
not,  they  must  stay  in  the  protected  industries  and  try  to  produce  under  Eu- 
ropean conditions.     What  else  is  there  to  do  ?     Think  of  it,  and  answer. 


234:  PKOTECTION    VS.   FREE  TRADE. 

iug  power  on  our  part.  "We  should  be  hopelessly  at  the 
mercy  of  the  foreign  market.  The  absurdity  of  the  pro- 
posal is  fairly  fantastic. 

But  the  exchange  could  not  go  forward.  We  can  not 
buy  the  "satisfaction  of  all  our  desires"  in  the  world's 
market.  For  nine  tenths  of  them  we  have  no  available  or 
possible  means  of  gratification  except  by  the  scheme  of 
direct  production. 

No  real  scientific  results  can  be  attained  l)y  the  atomis- 
tic view  of  the  co-workers  in  a  given  society  or  nation. 
Unless  burdened  by  inherited  injustices  and  artificial  ante- 
cedents, the  laws  of  nature  will  work  out  just  results  among 
the  competitions  in  the  body  of  the  nation.  The  attempt 
to  deal  with  the  individuals,  as  units,  involves  us  in  the 
vicious  error  to  which  Mr.  Herbert  Spencer  has  called  our 
attention,  that  of  "  mistaking  a  part  for  a  whole,"  and  thus 
"  its  relations  to  existence  in  general  will  be  misapprehend- 
ed." By  this  discrete  treatment  the  whole  is  completely 
lost  sight  of,  and  the  aggregates  which  the  whole  involve 
disappear  from  our  investigation.  Men  may  be  trusted  to 
pursue  the  industry  which  seems  to  offer  the  best  returns, 
and  this  is  done  by  them  as  individuals.  But  when  we 
come  to  the  exchanges  which  are  made  in  international 
commerce,  we  must  view  them  from  the  outside.  While, 
considered  as  individuals,  men  may  be  trusted  to  pursue 
the  industry  which  seems  to  offer  the  best  returns,  when 
we  come  to  international  exchanges  we  must  abandon  this 
atomistic  view  of  the  co-workers  in  an  organized  nation. 
Our  scientific  standpoint  must  be  at  an  elevation  which 
places  the  given  nation  in  proper  perspective  with  all  the 
other  political  and  industrial  units  which  compose  the 
commercial  nations  of  the  world,  who  also  have  "  desires  " 
which  they  wish  to  gratify.  The  wants  of  the  nation  as 
a  whole,  and  its  powers  of  supplying  them  as  a  whole — 


A  STILL  FURTHER  ANxVLYSIS.  235 

whether  by  domestic  production  or  forci<^n  exchange,  or 
by  their  joint  operation — are  aggregates.  The  nature  of 
our  surphis  production,  and  the  relation  of  that  surplus  to 
the  markets  of  the  world,  involve  aggregate  estimates. 
The  wants  of  foreign  nations  are  aggregates.  The  amount 
of  foreign  products  needed,  and  the  nature  of  the  purchase- 
money  which  we  carry  in  our  hands,  are  to  be  treated  as 
aggregates.  Our  wants  are  an  aggregate,  and  the  means 
of  buying  their  gratification  is  an  aggregate.  It  is  the 
business  of  the  legislator,  who  stands  for  all  of  us,  to  un- 
derstand these  details,  however  numerous  and  vexatious. 
The  founding  of  a  great  commercial  organization  like  A. 
T.  Stewart's  could  not  be  brought  about  by  the  unregu- 
lated individualism  of  department  superintendents,  clerks, 
and  porters.  So  some  one,  statesman  or  la}Tiian,  must  take 
the  trouble  to  sum  up  the  details  of  a  nation's  industrial 
resources  and  liabilities  into  the  correct  aggregate.^ 

The  "  equation  of  international  demand  "  sets  a  distinct 
limit  to  foreign  exchanges ;  the  law  of  "  reciprocal  de- 
mand "  hedges  our  power  of  "  satisfying "  our  "  desires " 
abroad.  Recurring  to  Prof.  Perry's  equation,  "the  silks 
which  England  wants  from  France  do  not  equal  the  cottons 
which  France  wants  from  England." 

N^ow,  what  is  the  aggregate  of  the  "  desires "  of  the 
people  of  the  United  States,  which  they  think  it  worth 
the  while  to  make  the  necessary  effort  and  sacrifice  to 
gratify?  The  census  of  18S0  gave  in  round  numbei's  the 
products  of   our  agricultural  and  extractive  industries  at 

*  Says  Prof.  Denslow :  "  The  man  who  says,  '  I  do  not  look  upon  the  ag- 
gregate people  of  a  country  en  masse,  nor  propose  any  paternal  panacea  for 
promoting  the  general  welfare ;  I  dissolve  your  so-called  general  welfare  into 
51,000,000  units,  and  propose  to  limit  the  function  of  government  to  keeping 
these  units  from  breaking  each  other's  heads ' — such  a  man  is  not  a  political 
economist  at  all.  His  calling  should  be  to  put  on  a  blue  uniform  and  carry 
a  policeman's  club." 


236  PROTECTION  VS.   FREE  TRADE. 

$2,200,000,000,  and  of  our  mechanical  industries  at  $5,300,- 
000,000.  Revised  and  safe  estimates  put  the  former  at 
$3,600,000,000  and  the  latter  at  $8,000,000,000.  Here, 
then,  is  a  gross  annual  productive  capacity  of  $11,600,000,- 
000.  Of  this  we  save  annually  the  sum  of  $1,000,000,000, 
which  is  added  to  the  capital  of  the  country,  to  be  employed 
for  the  pm'poses  of  future  production.  The  "  effective  de- 
sire of  accumulation  "  takes  effect  to  the  enormous  amount 
of  a  thousand  milHons  a  year — about  three  millions  a  day 
surplus  over  expenses — one  third  of  the  savings  of  the 
whole  human  family  are  made  in  the  United  States.^ 

This  leaves,  in  round  numbers,  $10,000,000,000  to  be 
spent  annually  by  the  people  of  the  United  States  for  the 
"  satisfaction  of  their  desires  "  for  the  purchase  of  services, 
which  issue  in  commodities — to  say  nothing  of  the  vast 
number  which  do  not  thus  issue.  This  is  the  tax  which 
their  natures  and  "  historical  antecedents  "  impose  on  them 
as  the  cost  of  the  lives  they  see  proper  to  lead.  It  is  a 
very  remarkable  evidence  of  the  productive  powers  of  the 
universal  activity  which  protection  has  stimulated,  that  we 
reproduce  every  five  years  the  entire  estimated  value  of 
all  the  goods,  wares,  and  merchandise,  lands,  improvements, 
and  money  of  the  entire  nation.  That  value  is  put  at 
$53,000,000,000,  greater  by  $10,000,000,000  than  the  value 
of  all  the  property  in  England. 

It  is  probably  not  possible  to  ascertain  of  this  aggre- 

1  Mulhall,  the  statistician,  says:  "Every  day  that  the  sun  rises  upon 
the  American  people  it  sees  an  addition  of  two  and  a  half  millions  of  dollars 
to  the  accumulated  wealth  of  the  republic,  which  is  equal  to  one  third  of 
the  daily  accumulation  of  mankind.     These  are  as  follows,  viz. : 

"  United  States $825,000,000 

France 375,000,000 

Great  Britain 325,000,000 

Germany 200,000,000 

All  other  coiintries 725,000,000." 


A   STILL   FURTHER  ANALYSIS.  237 

gate  the  exact  proportion  iu  whicli  satisfaction  of  tliese 
ten  thousand  miUion  "  desires "  is  furnished  at  home  and 
abroad  in  what  are  knowTi  as  ''protected  industries,"  that 
is,  industries  upon  the  like  products  of  which  made  abroad 
we  impose  tariii  duties  for  the  sake  of  "  protection "  and 
not  for  "  revenue  only." 

It  has  all  along  been  assumed  by  free-traders  tliat  the 
cost  of  the  domestic  ai'ticle  has  been  increased  over  that  of 
the  like  imported  article  by  the  amount  of  the  duty  im- 
posed. It  was  then  argued  that  the  price  of  the  eutire 
volume  of  home  manufactures  was  by  the  amount  of  the 
tariff  rate  increased  to  consumers,  no  part  of  which  went 
into  the  Treasury  of  the  United  States,  but  all  of  which 
went  into  the  pockets  of  the  home  manufacturer.  And 
thus  they  conceived  that  they  were  entitled  to  an  affii-mative 
answer  to  "  the  political  question  about  protection :  Does 
the  statute  enacted  by  the  legislature  alter  the  distribution 
of  property  so  that  one  man  enjoys  another  man's  earn- 
ings ;  has  the  State  a  law  in  operation  which  enables  one 
citizen  to  collect  taxes  of  another  ?  " 

Prof.  Perry  puts  this  tax,  levied  upon  the  people  for 
the  benefit  of  the  protected  industries,  at  8600,000,000  an- 
nually, reached,  by  dead-reckoning,  thus :  "  If  now  we  may 
fairly  suppose  that,  on  the  average  of  each  one  foreign 
article  paying  a  duty  into  the  treasury,  there  were  four 
domestic  articles  raised  each  in  price  as  much  as  the  for- 
eign article  paid  in  duty,  then  it  follows  that  the  people 
paid,  in  each  of  those  years,  under  chiefly  protective  tariff 
taxes,  $632,000,000,  or' $12,040,000,000  in  all,  no  penny  of 
which  went  to  the  Treasury  of  the  United  States  ;  that  this 
is  a  reasonable  supposition  appears  partly  from  the  known 
proportion  between  imported  and  domestic,  as  to  several 
leading  articles:  for  examj)le,  of  steel  rails  in  1S80  the 
domestic  was  twenty  times  the  imported,  and  the  people 


238  PROTECTION  VS.   FEEE  TRADE. 

paid  nineteen  times  more  under  the  duty  tlian  tlie  treasury 
got.  On  woolen  blankets,  in  1881,  the  treasury  took  in 
less  than  $2,000,  while  the  people  paid  in  the  extra  price 
of  blankets  more  than  a  thousand  times  that  sum  that  year. 
And,  on  iron  goods  of  all  kinds,  we  have  seen  that  the 
average  duty  was  about  seventy-seven  per  cent,  while  the 
vast  bulk  of  the  iron  consumed  is  known  to  be  of  domestic 
production ;  and  that  this  is  a  reasonable  supposition  ap- 
pears further,  if  we  look  at  the  annual  average  amount  of 
domestic  manufactured  goods ;  the  census  of  1S80  gave 
$5,232,000,000  as  the  value  of  home  manufactures  for  that 
year,  which  we  may  fairly  take  as  the  average  of  the  twenty 
years  under  consideration ;  and,  if  we  throw  off  one  third 
of  those  as  not  affected  hy  the  tariff  at  all,  and  consider  that 
the  rest  were  only  raised  in  price  twenty-two  per  cent — 
which  is  one  half  the  average  rate  of  duty  on  dutiable  goods 
— then  almost  precisely  the  same  results  ^^^11  follow  as  be- 
fore, namely,  an  annual  average  of  $632,000,000  paid  by 
the  people  under  the  protective  tariff,  no  cent  of  which 
reaches  the  national  treasury.  An  acknowledged  statistical 
expert,  J.  S.  Moore,  calculated,  from  data  similar  to  our 
own,  that  the  people  paid  $1,000,000,000,  in  1882,  extra 
to  the  sum  reaching  the  treasury  under  protective  tariff 
taxes."  ^ 

'  This  kind  of  reasoning  exposes  Perry  to  the  criticism  which  Prof.  Ely 
fiercely  makes  on  Ricardo  and  his  "  Political  Economy."  Those  deductioilista 
are  all  alike  :  "  No  mention  is  made  of  a  single  event  which  ever  occurred. 
It  is  really  astounding  when  one  thinks  of  it.  The  whole  discourse  is  hypo- 
thetical. '  Suppose  now  a  machine,'  writes  Ricardo  in  one  place,  '  which 
could,  in  any  particular  trade,  be  employed  to  do  the  work  of  one  hundred 
men  for  a  year,  and  that  it  would  last  only  for  one  year.  Suppose,  too,  the 
machine  to  cost  £5,000,  and  the  wages  annually  paid  to  one  hundred  men  to 
be  £5,000,  it  is  evident  that  it  would  be  a  matter  of  indifference  to  the 
manufacturer  whetlier  he  bought  the  machine  or  employed  the  men.  But 
suppose  labor  to  rise  and  consequently  the  wages  of  one  hundred  men  for  a 


A  STILL  rURTEER  ANALYSIS.  239 

The  ''  one  third"  indicated  in  italics  is,  then,  the  length 
and  breadth  of  the  field  of  employment,  the  "  something 
else  "  which  we  can  do,  when  we  abandon  protection  and 
the  protected  industries.  The  Parsee  merchant  known  by 
the  words  and  figures  ''  J.  S.  Moore,"  does  not  balk  at  all 
at  putting  this  tax  at  $1,000,000,000.  One  would  think 
that  such  a  reductio  ad  absurdum  would  arouse  suspicion, 
and  lead  to  a  recasting  of  calculations. 

year  to  amount  to  £5,500,  it  is  obvious  the  manufacturer  would  now  no 
longer  hesitate ;  it  would  be  his  interest  to  buy  the  machine,  and  get  his 
work  done  for  £5,000.  But  will  not  the  machine  rise  in  price  ?  ...  It 
would  rise  in  price,  if  there  were  no  stock  employed  in  its  construction.  .  .  . 
If,  for  example  ' — and,  in  this  strain,  which  sufficiently  illustrates  his  style 
and  method,  Ricardo  continues  indefinitely.  Inside  of  two  pages,  he  intro- 
duces no  fewer  than  thirteen  distinct  suppositions,  all  of  them  purely  imagi- 
nary." 


CHAPTER  XL 

SCHEDULE   A — PEODUCTION   UNDER   FEEEDOM. 

During  tlie  recent  tariff  debate  in  Congress  (1884),  a 
dozen  or  more  speakers  produced  "  Scliedule  A,"  as  they 
called  it.^     Tlie  schedule  is  as  follows : 

'  This  schedule  was  first  propounded  by  Hon.  William  R.  Springer,  in  an 
article  entitled  "  Incidental  Taxation,"  in  the  "  North  American  Review  "  for 
June,  1883,  which  contains  a  very  precise  and  detailed  estimate,  and  which 
makes  the  amount  of  this  tax  very  definitely,  $556,933,637. 

For  the  purposes  of  the  argument  in  hand,  it  is  not  necessary  to  expose 
the  fallacious  method  of  manipulating  these  figures,  some  of  which  are  offi- 
cial and  some  of  which  are  "I'igged"  to  suit  the  purposes  of  their  compiler. 

Especially  it  will  be  observed  that  the  "  estimated  rate  of  increase  ad  va- 
lorem "  is  less  in  every  instance  than  the  rate  of  duty  imposed.  This  is  a 
concession  which  sustains  the  protectionist,  and  shows  progress  in  the  direc- 
tion which  the  protectionist  urges,  that  with  increasing  skill  the  domestic 
article  can  be  produced  as  cheaply  as  the  foreign.  Everything  on  the  list 
(as  appears)  can  be  produced  and  sold  cheaper  than  the  foreign  article,  iphis 
the  duty.  It  will  inevitably  result  that  they  can  all  be  sold  at  the  cheapest 
rate  which  American  skill  and  competition  can  achieve.  The  rates  of  in- 
crease given  above  are  purely  conjectural,  and  are  vastly  overstated. 

The  table  makes  the  contribution  of  labor  to  the  value  of  the  finished 
fabrics  less  than  20  per  cent,  and  rent  and  profits  more  than  80  per  cent  of 
the  proceeds.  This  is  a  guess,  and  a  palpable  error.  On  these  figures,  the 
foreigner  would  sell  the  $2,440,502,649  for  $1,883,564,012.  Deducting 
wages  at  the  American  rate,  this  would  leave  for  rent  and  profits  to  the  for- 
eign manufacturer,  $1,506,851,210,  which  is  again  80  per  cent,  or,  if  they 
had  paid  the  total  American  wages,  the  profits  would  have  been  over  70  per 
cent,  a  I'ate  not  possible  in  Europe,  as  we  have  all  been  taught  to  believe. 

Again,  the  number  of  hands  employed  in  the  protected  industries  is  given 
as  1,327,881.  If  this  is  meant  to  include  all  who  are  directly  and  indirectly 
concerned  in  producing  the  finished  fabric  from  the  raw  materials,  and  who 


SCHEDULE   A— PRODUCTION  UNDER   FREEDOM. 


241 


'^  .S  s  P 


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— beiiif?  the  in- 
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12 


242  PROTECTIOX    vs.   FREE  TRADE. 

"\Ye  deal  with  the  figures  as  they  are,  and  with  the  argu- 
ment which  they  are  intended,  by  impHcation,  to  support. 
They  are  intended  to  assert  that,  somewhere  between  the 
producer  in  the  protected  industry  and  the  consumer  of  his 
product,  productive  forces  are  lost ;  and  that  the  actual 
earnings  of  the  latter  are,  by  force  of  the  protective  statute, 
transferred  to  the  former.  The  inference  is  meant  to  be 
drawn  that  every  individual  farmer  got  less  iron  for  his 
wheat  under  this  disj^ensation ;  that  every  individual  labor- 
er, every  hedger  or  ditcher,  with  two  dollars  in  his  pocket, 
is  compelled  to  spend  tliem  both,  to  j^rocrn'o  at  home  what 
he  could  purchase  abroad  for  one  dollar ;  and  that  some 
receiver  of  fixed  income,  derived  from  American  enter- 
prise, could  take  the  money  which  he  received  from  Ameri- 
can consumers  of  his  services  and  buy  two  broadcloth  coats 
in  London,  instead  of  one  in  Kew  York. 

Extract  from  Hon.  Frank  Kurd's  ^  speech  in  Congress, 
April  29,  1881 : 

"  If  I  have  by  a  day's  labor  earned  one  dollar,  it  is  my 

are  supported  by  the  protected  industries,  the  number  is  evidently  below  the 
fact.  The  number  of  men  engaged  in  these  industries  and  those  necessarily 
related  to  them  is  neariy  5,000,000 — considerably  more  than  one  fourth  of  the 
adult  male  population  of  the  country. 

"  Sundries  "  may  or  may  not  conceal  a  large  African.     I  do  not  know  how 
it  is  arrived  at. 

*  The  depths  of  4)athos  which  some  gentlemen  can  reach  by  mere  rhetoric 
are  beyond  the  reach  of  any  plumb-line.  When  it  comes  to  logic,  these 
people  strike  their  heads  on  hard  facts  before  they  get  their  bodies  out  of  the 
range  of  unpleasant  exposure.  This  kind  of  economics  is  illustrated  by  the  ■ 
story  of  Artemus  Ward's  first  visit  to  Cleveland.  Approaching  a  stranger,  he 
asked : 

"  I  beg  your  pardon,  but  could  you  tell  a  stranger  where  a  dinner  could 
be  obtained  for  a  quarter  of  a  dollar  ?  " 

"  Right  over  the  way,"  was  the  reply. 

"  I  beg  pardon,  but  one  question  more.     Could  you  inform  me  where  a 
stranger  could  get  the  quarter  of  a  dollar  ?  " 

We  await  Mr.  Hurd's  answer  to  this  conundrum. 


SCHEDULE   A— rRODUCTION   UNDER  FREEDOM.  243 

own.  It  represents  the  toil,  tlie  anxieties,  the  life  of  one 
day.  It  is  all  that  I  have  in  material  product  to  represent 
that  day.  With  that  dollar  I  go  to  pui-chase  from  a  French- 
man an  article  which  I  wish.  The  contract  is  about  to  be 
consummated.  The  Government  of  the  United  States 
steps  in  with  its  power  and  says, '  You  shall  not  buy  of  this 
Frenchman ;  you  must  buy  of  an  American ' — a  man,  say, 
who  manufactures  ihis  article  at  Providence,  R.  I.  I  go 
to  him  with  my  doUar,  and  propose  to  buy  the  article 
which  for  that  sum  I  could  have  obtained  from  the  French- 
man. '  Xo,'  says  the  manufacturer,  '  I  charge  more  than  a 
dollar  for  this  article ;  you  must  pay  me  two  dollars.'  " 

This  is  the  old  assumption  that  what  is  true  of  the  indi- 
vidual, considered  in  his  social  group,  is  true  of  him  apart 
from  his  social  group.  It  is  an  assumption  that  a  structural 
part  in  an  organism  could  perform  the  same  functions,  as  a 
separate  whole,  which  it  does  when  correlated  with  the 
other  units  in  an  organic  whole.  It  is  an  assumption  that 
what  is  true  of  hydrogen  in  a  chemist's  jar  is  true  of  the 
hydrogen  in  the  Atlantic  Ocean. 

Manufactures  are  supported  by  agriculture  and  mining. 
But  the  manufacturer  is  not  supported  by  the  agriculturist 
and  miner,  in  the  sense  of,  at  the  expense  of — by  taxation 
levied  upon  one  for  the  other.  They  are  co-workers  in  one 
entity.  We  have  the  authority  of  Bastiat  for  their  func- 
tions in  a  society  :  "  Agriculture,  manufactures,  commerce, 
may  be  an  excellent  classification  when  the  object  is  to  de- 
scribe the  processes  of  art ;  but  that  description,  however 
essential  in  technology,  has  little  connection  with  social 
economy — I  should  even  say  that  it  was  positively  danger- 
ous. When  we  have  classed  men  as  agriculturists,  manu- 
factm'ers,  and  merchants,  of  what  can  we  speak  but  of 
their  class  interests,  of  those  special  interests  to  which  com- 
petition is  antagonistic,  and  which  are  placed  in  opposition 


244  PROTECTION  VS.   FREE  TRADE. 

to  tlie  general  good  ?  It  is  not  for  the  sake  of  agriculturists 
that  agriculture  exists ;  of  manufacturers  that  we  have  man- 
ufactures, or  of  merchants  that  we  have  exchanges,  but  in 
order  that  men  should  have  at  their  disposal  the  greatest 
amount  of  commodities  of  every  kind."  ("  Economic  Har- 
monies.") 

"  The  illusion  which  I  am  combating,  that  demand  and 
supply  are  independent  economic  forces,  sometimes  assumes 
another  form,  in  the  notion  that  producers  and  consumers 
are  distinct  classes,  and  that  production  and  consumption 
are  acts  which  may  go  on  irrespective  of  each  other." 
(Prof.  Cairnes.) 

They  are  organs  of  one  body. 

Now,  it  was  never  true  that  any  particular  farmer  in 
the  United  States,  i?i  connection  ivlt/i  all  the  other  farmers^ 
could  get  more  iron  for  his  wheat  in  England  than  at  home. 
It  was  never  true  than  any  particular  laboring-man  who 
had  earned  two  dollars  by  rendering  services  to  his  fellow- 
citizens  here,  in  connection  with  all  the  other  like  lahorers, 
could  buy  abroad  for  one  dollar  what  cost  two  here.  If  he 
spent  two  dollars  in  Providence,  instead  of  one  dollar  in 
England,  it  was  because  the  societary  movement,  of  which 
Providence  was  a  part,  enabled  him  to  have  the  two  dol- 
lars in  his  pocket,  where  England  would  have  put  but  one. 
He  had  the  two  dollars  when  he  started  for  Providence. 
It  was  never  true  that  any  professor  who  receives  his  twenty- 
hve  hundred  dollars  from  his  fellow-citizens  here,  in  con- 
nection with  all  other  salary-earners^  could  get  more  broad- 
cloth for  the  price  of  his  services  abroad  than  here.  Any 
one  of  them,  having  got  his  wages  under  the  present  ar- 
rangement in  his  j)ocket,  might  buy  a  single  ton  of  iron,  a 
blanket,  or  a  suit  of  clothes  at  a  better  bargain  to-day. 
The  farmer  wishes  good  prices  for  his  wheat,  the  laborer 
high  wages,  and  the  professor  a  worthy  salary — in  return 


SCHEDULE   A— PEODUCTION   UNDER  FREEDOM.  245 

for  the  services  which  they  render  to  their  neighbors.  If 
their  neighbors,  the  rest  of  us,  are  given  no  chance  to  ren- 
der services  in  return,  how  are  we  to  pay  their  profits, 
their  wages,  and  their  salaries  ?  Who  is  to  pay  them  the 
means  of  purchasing  the  next  ton  of  iron,  the  next  blanket, 
and  the  next  London  suit  ?  The  farmer  ?  Not  he  :  we 
have  seen  that  his  raw  products  have  lost  their  exchange 
value,  and  that  free  foreign  trade  has  robbed  him  of  all  the 
gratuities  of  his  rich  soil.  The  laborer  and  the  professor 
have  nothing  to  export.  If  the  return  services  are  to  come 
from  abroad,  the  laborer  and  the  professor,  at  least,  had 
better  live  abroad. 

Professors  in  colleges,  the  capitalists  whose  money  is 
invested  in  banks,  railroads,  farms,  and  plantations  worked 
by  tenants,  go  abroad.  In  London,  Paris,  and  Berlin  they 
purchase  many  articles  of  vertu,  household  decoration,  and 
personal  adornment,  which  we  either  can  not  make  at  all  or 
can  not  make  as  cheap  as  the  foreign  artisan.  Our  travelers 
soon  acquire  an  air  of  condescension  toward  Americans 
and  America's  products ;  they  are  fond  of  reckoning  the 
cost  in  "  francs  "  or  "  pounds  sterling."  On  their  return 
they  are  landed  at  a  custom-house,  and  the  "  wealth  "  they 
are  bringing  into  the  country  in  the  shape  of  gloves,  cra- 
vats, and  the  like,  is  intercepted  long  enough  to  enable  the 
Government  to  collect  the  share  of  taxes  which  they  ought 
to  contribute  to  the  common  revenue.  The  professors  and 
the  capitalists  are  hurt  as  to  their  f  eehngs,  and  proceed  at 
once  to  join  a  free-trade  club.  They  try  to  forget  that 
their  colleges,  banks,  railroads,  and  farms  are  on  the  Hud- 
son, the  Delaware,  and  Mississippi,  and  not  on  the  Thames, 
the  Seine,  and  the  Congo.  They  try  to  ignore  the  great 
fact  that  the  earning-power  of  their  possessions  is  rooted  in 
the  American  industrial  organization.  Most  of  us  do  not 
make  voyages  abroad,  and  do  not  encounter  the  custom- 


2-1:0  rnOTECTION    vs.   FREE   TRADE. 

house  officer.  The  expenditures  of  the  American  farmer 
and  laborer,  and  of  every  average  household,  are  met  here, 
in  our  own  market,  on  better  terms,  both  as  to  abundance 
and  cheapness,  than  in  any  market  in  the  world.  AYe  have 
found  no  commodity  which  any  foreign  nation  can  furnish 
us  at  less  cost  in  labor  and  abstinence. 

The  farmer,  the  laborer,  and  the  manufacturer  resume, 
then,  on  our  own  soil,  the  system  of  the  division  of  func- 
tions which  is  natural  to  us.  The  industrial  system  is  a 
social  co-operation,  working  automatically.  To  quote  our 
author  of  "  Social  Classes,"  who  writes  forcibly  always, 
and  most  sensibly  when  out  of  range  of  free-trade  prepos- 
sessions :  "  All  this  goes  on  so  smoothly  and  accurately 
that  we  forget  to  iiotice  it.  We  think  that  it  costs  noth- 
ing— does  itself,  as  it  were.  The  truth  is,  that  this  great 
co-operative  effort  is  one  of  the  great  products  of  civiliza- 
tion— one  of  its  costliest  products  and  highest  refinements." 
Our  co-oi3erative  scheme  can  only  be  marred  by  trying  to 
gear  it  into  foreign  machinery.  It  is  ours,  local  and  not 
cosmopolitan.^ 

'  This  industrial  structure  is  not  only  local  in  its  origin  in  that  it  could 
not  be  imported — it  is  also  a  growth  on  the  soil. 

"  Even  more  important  than  the  differences  in  the  physical  strength  and 
vigor  of  laborers  are  the  variations  that  we  find  in  the  skill  and  intelligence, 
their  foresight,  quickness,  vigilance,  and  resource  in  availing  themselves  of 
advantages  which  forward  production  and  in  avoiding  or  removing  all  that 
impairs  it.  Superiority  in  these  respects  is  partly,  as  I  have  said,  congenital 
and  transmitted  through  physical  heredity ;  but  to  a  great  extent  they  are 
handed  down  from  generation  to  generation  by  conscious  training  and  learn- 
ing ;  primarily  by  technical  training  and  learning  of  special  arts  and  pro- 
cesses, though  the  effort  of  general  education  in  developing  industrial  intelli- 
gence must  not  be  overlooked.  We  must  also  bear  in  mind  the  extent  to 
which  industrial  efficiency  is  transmitted  by  association  and  unconscious  imi- 
tation. '  The  child,'  says  Prof.  Walker,  '  becomes  a  better  workman  simply 
by  reason  of  being  accustomed,  through  the  years  of  his  own  inability  to 
labor,  to  see  tools  used  with  address,  and  through  watching  the  alert  move- 
ments, the  prompt  co-operation,  the  precise  manipulation  of  bodies  of  work- 


SCHEDULE   A— PRODUCTION   UNDER  FREEDOM.  247 

Our  author  fitly  cliaracterizes  the  attempt  of  the  atom 
— the  unit — the  individual,  the  organ,  which  endeavors  to 
evade  its  share  of  the  proper  work  of  the  organism  and  to 
do  better  for  itself  than  the  whole  to  which  it  belongs. 
"  There  is  no  man,  from  the  tramp  up  to  the  President, 
the  Pope,  or  the  Czar,  who  can  do  as  he  has  a  mind  to. 
There  never  has  been  any  man,  from  the  primitive  bar- 
barian up  to  a  Humboldt  or  a  Darwin,  who  could  do  as  he 
had  a  mind  to.  The  Bohemian  who  determines  to  realize 
some  sort  of  liberty  of  this  hind,  accomplishes  his  purpose 
only  by  sacrificing  most  of  the  rights,  and  turning  his  back 
on  most  of  the  duties,  of  a  ci\dlized  man,  while  filching  as 
much  as  he  can  of  the  advantages  of  living  in  a  civilized 
state."  *  Individualism  is  an  impossibility  in  either  a  politi- 
cal or  industrial  organism. 

men.  This  unconscious  imitation  operates  powerfully  in  keeping  up  the 
habitual  energy  of  individuals  in  a  society  where  a  high  average  standard 
of  energetic  work  is  maintained.  The  more  prudence  and  self-control  the 
laborer  has,  the  more  he  will  increase  the  wealth  of  the  community ;  while, 
again,  the  more  he  is  actuated  by  sense  of  duty  and  wide  public  spirit,  the 
more  productive  his  labor  will  be  under  circumstances  in  which  the  coinci- 
dence between  his  own  interests  and  that  of  society  is  wanting  or  obscure.'  " 
(Sidgwick,  p.  104.) 

Pascal  says,  "  Humanity  is  like  one  man  who  lives  and  learns  always." 
'  What  Mr.  Frederick  Pollock  ("  History  of  the  Science  of  Politics  ")  says 
of  men  in  their  political  relations  is  equally  true  of  them  in  their  industrial 
relations :  "  Man  is  born  to  be  a  citizen  in  that  he  comes  into  an  existing 
social  order,  and  is  attached  to  it  by  duties  of  others  to  himself,  and  himself 
to  others,  which  are  not  and  can  not  be  of  his  own  making.  He  does  not 
come  into  the  world  as  an  unrelated  unit,  and  acquire  by  some  convention  a 
fantastic  title  to  some  hundred  thousandth  undivided  part  of  the  indivisible 
sovereignty  of  the  people." 

"  Man  is  born  to  be  a  citizen  "  is  the  underlying  maxim  of  Aristotle.  The 
"  clanless  and  masterless  man  "  is  a  kind  of  monster.  The  state  is  the 
highest  unit  yet  evolved,  and  men  are  not  yet  citizens  of  an  indefinite  uni- 
verse. A  man  is  born  a  citizen  of  a  definite  state  with  a  definite  kind  of 
social  existence.  The  state  is  natural,  first  as  imposed  on  man  by  the  gen- 
eral and  permanent  conditions  of  life ;  and  nest,  is  the  only  form  of  life  we  as 


248  PROTECTION  VS.   FREE  TRADE. 

So  of  certain  economic  Bohemians,  tliey  wonld  turn 
their  backs  on  most  of  their  duties  to  their  fellow-citizens, 
and,  having  filched  all  they  can  of  the  advantages  of  living 
in  our  great  co-operative  system,  would  sacrifice  the  right 
of  the  society  which  has  placed  in  their  hands  the  purchase- 
money  by  means  of  which  they  supply  their  wants. 

But  let  us  return  to  our  aggregate.  Some  of  us  can 
satisfy  some  of  our  desires  by  exchanges  abroad.  Can  all 
of  us  satisfy  all  our  desires  by  purchase  abroad  ?  "We  shall 
see. 

The  satisfaction  of  the  aggregate  desires  of  the  people 
of  the  United  States  requires  an  outlay  of  effort,  and  sacri- 
fice embodied  in  services  and  commodities,  which  have  the 
exchange  value  of  $10,000,000,000  annually.  It  may  be 
we  were  wrong  a  hundi'ed  years  ago  in  laying  gi'ounds  for 
having  so  many  people  here.  It  may  be  that  these  people 
are  wrong  in  harboring  these  desires,  the  gratification  of 
which  subjects  them  to  such  an  enormous  tax.  It  may  be 
that  if  they  had  kept  their  desires  for  the  necessaries,  con- 
veniences, amusements,  and  luxuries  of  life  within  bounds, 
they  would  not  have  been  put  to  so  much  trouble  in  sup- 
plying them.  It  may  be  that  civilization  and  modern  prog- 
ress and  great  achievements  "  don't  pay."  It  may  be  that 
the  jelly-fish  and  the  clam  are  better  types  of  "  li\"ing  and 
being  comfortable,"  and  better  illustrate  the  blessings  of 
"  leisure."  But  "  inherited  traits  and  historical  traditions  " 
are  against  us.  If,  after  what  "  God  had  done  in  the  way 
of  piling  up  mountains  of  iron,  silver,  and  gold,  filling  the 
bowels  of  the  earth  with  salt,  coal,  and  petroleum,  and  cov- 

yet  know  of,  in  which  man  can  do  the  best  he  is  capable  of.  The  substance  of 
Burke's  comment  on  Aristotle  is  that  civil  society  will  not  come  by  counting 
of  heads  ;  it  is  a  social  organism  and  a  social  discipline.  If  it  is  artificial  in 
its  perfection,  3-et  it  is  more  truly  a  state  of  nature  than  a  savage  and  inco- 
herent mode  of  life,  or  rather  it  is  this,  because  it  is  artificial ;  for  "  art  is 
man's  nature."     "  One  man,"  says  Aristotle,  "  is  no  man." 


SCHEDULE  A— PRODUCTIOX  UXDER  FREEDOM.    249 

ering  its  surface  for  centuries  with  ricli  vegetable  mold, 
and  watering  it  with  mighty  lakes  and  rivers,  and  planting 
boundless  forests,"  he  also  set  fifty  millions  of  Yankees 
down  among  them,  with  their  illimitable  capacities,  and 
boundless  aptitudes,  and  insatiable  desires,  we  may  rever- 
ently conclude  that  he  designed  the  adjustment  of  the  or- 
ganism to  its  environment.  These  desires  then  are  natural, 
legitimate,  and  necessary,  and  we  have  thought  it  worth 
while  to  gratify  them.  Either  the  nature  of  the  organic 
being  with  which  we  are  dealing  must  be  changed,  or  we 
must  change  its  environment. 

Of  this  aggregate  we  satisfy  them  to  the  amount  in 
round  numbers  of  $6,700,000,000  by  the  direct  appHcation 
of  our  o^vn  energies  to  our  own  resources.  The  census 
shows  that  laborers  on  them  embrace  one  hundred  and 
thirty-five  classes.  Their  labors  include  most  articles  of 
common  use,  and  laborers  get  a  larger  share  in  making 
these  commodities  than  in  making  luxuries.  These  result 
in  productions  against  which  no  foreigner  can  compete — 
productions  not  in  the  "  protected  industries." 

We  import  annually  commodities  which  we  can  not 
pretend  to  produce  (tea,  coffee,  fi'uits,  etc.),  which  gratify 
other  desires  to  the  amount  of  $300,000,000. 

According  to  "  Schedule  A "  (which,  for  the  purpose 
of  this  argument  alone,  we  accept  as  correct),  the  remaining 
desires  are  for  commodities,  some  of  which  are  produced  in 
the  "  protected  industries  "  here,  and  others  of  hke  charac- 
ter by  manufacturers  abroad.  They  amoimt,  in  round 
numbers,  to  $3,000,000,000  (domestic,  $2,440,502,649 -f 
$433,173,335  foreign ;  total,  $2,873,675,984). 

That  they  are  legitimate  desires  appears  from  the 
schedule.  They  are  chemical  products ;  earthenware  and 
glassware ;  metals,  iron  and  steel,  and  all  metal  manufact- 
ures ;  wood  and  wooden-wares ;   sugar  and  molasses ;  to- 


250  PROTECTION  VS.   TREE   TRADE. 

bacco ;  cotton  and  cotton  goods ;  hemp,  jnte,  and  flax 
goods  ;  wool  and  woolen  goods ;  silk  and  silk  goods ;  books, 
paper,  etc.  ;  "  sundries." 

Now,  the  free-trade  proposal  is,  in  order  to  save  $556,- 
938,637 — which  is  the  tux  which  the  protective  statute  en- 
ables one  group  of  citizens,  the  manufacturers,  to  collect 
of  another  group,  the  consumers — that  we  shall  buy  the 
goods  in  the  foreign  market. 

It  is  a  law  of  international  trade  that  the  exports  must 
pay  for  the  imi:)orts  /  commodities  must  be  paid  for  by 
commodities.  "We  then  propose  to  import  goods  to  the 
amount  of  $3,000,000,000  annually.  With  what  do  we 
propose  to  pay  for  them  ?— $800,000,000  of  exports !  Of 
these,  $700,000,000  is  in  food  and  raw  materials — all  the 
foreign  market  will  take — and  $100,000,000  in  manufact- 
ured goods,  of  the  only  kind  with  which,  just  now,  we  can 
beat  our  competitors.  "We  propose  to  buy  $3,000,000,000 
with  $800,000,000!  The  trade  is  impossible.  We  have 
been  so  often  confronted  with  this  dilemma,  we  have  dealt 
with  it  so  carefully,  patiently,  and  even  tediously,  that  it 
is  time  to  be  done  with  it.  It  is  time  to  characterize  this 
assumption  of  an  illimitable  foreign  market,  either  as  con- 
taining a  surplus  of  commodities  we  would  buy,  or  as  ade- 
quate to  take  the  proceeds  of  our  "  land  industries  "  which 
we  would  sell,  as  it  deserves.  It  is  an  unfortunate  sug- 
gestion, a  vain  proposal,  a  pretentious  lie,  a  stupendous 
fraud,  a  solemn  humbug.  We  can  not  huy  more  value  than 
we  can  sell.  We  can  not  therefore  hity  the  "  satisfaction  " 
of  all  our  "  desires "  for  goods  manufactured  in  the  pro- 
tected mdustries.  l!^or  are  they  for  sale  in  any  market  in 
the  world  except  our  own. 

We  now  see  the  bog  into  which  the  professors  and 
statesmen  have  floundered.  The  fallacy  wliich  they  have 
played  on  themselves  is  an  old  one.     It  is  the  "  fallacy  of 


SCHEDULE   A— PRODUCTION   UNDER   FREEDOM.  £51 

division."  Surely  these  people  must  have  run  across  it  in 
Archbishop  Whately's  "  Logic  "  : 

"  This  is  a  fallacy  with  which  men  are  extremely  apt 
to  deceive  themselves,  for,  when  a  multitude  of  j)articulars 
are  presented  to  the  mind,  many  are  too  weak,  or  too  indo- 
lent, to  take  a  comiyrehensive  view  of  them,  but  confine 
their  attention  to  a  single  point  in  turn,  and  then  decide, 
infer,  and  act  accordingly.  For  example,  the  imprudent 
spendthrift,  finding  that  he  is  able  to  afford  this  or  that,  or 
the  other  expense,  forgets  that  all  of  them  together  will 
ruin  him." 

It  is  the  illogical  attempt  to  draw  a  universal  conclusion 
from  a  particular  premise :  "  Some  foreign  exchanges  are 
feasible  and  profitable,  therefore  all  foreign  exchanges  are 
feasible  and  profitable."     It  is  a  non  sequitur. 

Now  we  see  the  trouble  with  the  atomistic  view  of  so- 
ciety, with  this  sending  the  individual  all  over  the  planet 
with  a  salable  article  in  his  peddler's  pack  to  find  a  pm*- 
chaser.     If  one  man  may  peddle,  all  may  peddle. 

One  man  may  draw  a  prize  in  a  lottery,  all  can  not. 

One  man  may  get  rich  smuggling,  all  can  not. 

!N"ow  we  can  answer  the  question  why,  if  a  man  trades 
with  profit  between  southern  Yermont  and  northern  Mas- 
sachusetts, he  should  not  be  allowed  to  make  equal  profit  by 
a  free  trade  between  northern  Yermont  and  Canada.  If 
one  man  may  thus  trade,  all  may. 

The  individual  peddler  and  the  individual  free-trader 
may  drive  a  profitable  trade  for  a  while.  But,  if  we  all 
trade,  and  all  undertake  to  buy  abroad  the  satisfaction  of 
our  desires,  we  discover  that  we  can  not  do  it. 

The  Minnesota  farmer  asks  what  difference  does  it 
make  to  him  whether  the  thousand  barrels  of  flour  which 
he  sells,  at  a  price  fixed  in  Mark  Lane,  is  consumed  in 
Lowell  or  Manchester,  and  why  he  can  not  freely  import 


252  PROTECTION    T^^.   FREE   TRADE. 

the  tilings  lie  needs  for  the  flour  he  exports.  There  is  no 
reason,  if  he  were  not  an  individual  in  a  social  group,  and 
if  the  welfare  of  the  group  were  not  the  proper  end  of 
government.  If  all  the  individuals  in  the  group  did  the 
same,  all  would  fail  to  get  the  import  corresponding  to 
the  export ;  or,  rather,  the  failure  of  the  export  would  re- 
sult in  the  failure  of  the  import,  and  their  desires  would 
fail  of  gratiflcation. 

JSTow,  take  the  nation  at  large — all-of-us — we  can  not 
by  exports  purchase  all  the  commodities  named  in  Sched- 
ule A  if  we  connect  them  by  the  copulative  "  and." 

We  can  buy  $800,000,000  worth,  or,  under  free  trade, 
the  foreign  market  might  be  slightly  enlarged,  though  free 
trade  would  make  no  more  mouths  to  feed  in  Europe,  nor 
induce  the  cultivation  of  less  acres  there ;  their  home  pro- 
duction and  our  $300,000,000  food-exports  seem  to  keep 
them  alive. 

The  exports  involved  in  the  discussion  are  exports  of  food 
and  raw  matenals.  They  are  $700,000,000  annually,  but  one 
half  of  this  amount  goes  to  fruits,  wines,  tea,  coffee,  and 
leaving  $350,000,000  with  which  we  can  buy  just  one  eighth 
of  the  manufactured  commodities  we  need.  The  other  seven 
eighths  we  must  manufacture  for  ourselves,  or  go  without. 

We  may  then  buy  abroad  the  commodities  named  in 
Schedule  A  to  the  amount  of  $700,000,000  if  we  go  with- 
out tea,  coffee,  fruits,  etc.  We  may  combine  them  in  any 
proportion  we  please,  only  so  that  no  group  exceeds  that 
amount.  We  may  buy,  with  or  vsdthout  a  tariff,  "  metals," 
$678,981,448 ;  or,  "  cotton  and  cotton  goods,"  "  wool  and 
woolen  goods,"  $500,680,843  ;  or,  "  wood  and  wooden- 
ware,"  "  sugar  and  molasses,"  "  earthenware  and  tobacco," 
$597,459,340;  or,  "chemical  products,"  "silk  and  silk 
goods,"  "books,  papers,"  "hemp,  jute,  and  flax  goods," 
etc.,  $328,443,980  ;  or,  '■  sundries,"  $728,110,383  ;  but  we 


SCHEDULE  A— PRODUCTION  UNDER  FREEDOM,    253 

can  not  buy  them  all.  The  rest  we  must  make  or  go  with- 
out.    We  prefer  to  make  them. 

AVe  now  come  to  see  just  the  economic  force  of  the 
following  point  put  by  Prof.  Sumner  in  his  Icctm-cs  ("  Pro- 
tection in  the  United  States  ") : 

"  By  the  census  of  1870,  the  laborers  engaged  in  manu- 
facturing pig-iron  numbered  altogether  27,554,  and  their 
wages  amounted  to  $12,400,000.  The  capital  employed 
is  returned  at  $56,100,000.  We  are  pointed  to  this  as  a 
great  industry — a  grand  thing  to  have.  The  duty  was, 
when  the  census  was  taken,  $9  per  ton,  and  the  market 
price  of  American  over  imported  iron  showed  that  this 
sum  was  directly  added  to  the  cost  of  all  we  used.  The 
product  of  the  home  manufacture  was  2,000,000  tons,  on 
which  the  tariff  cost  us  $18,000,000,  of  which  the  public 
treasury  got  not  one  cent.  Seven  per  cent  on  the  capital 
in  pig-iron  manufacture  would  be  $3,900,000,  which,  with 
the  wages  paid  to  labor  in  that  trade,  would  make  $16,- 
000,000.  If,  therefore,  we  had  made  a  bargain  with  the 
pig-iron  manufacturers  to  let  their  capital  decay,  paying 
them  seven  per  cent  on  it  and  with  the  people  employed 
to  stay  idle,  while  we  paid  them  their  full  wages,  provided 
that  we  might  have  our  iron  free,  we  should  have  made 
$2,000,000  per  annum,  to  say  nothing  of  the  fact  that,  at 
the  lower  price,  we  might  have  afforded  a  larger  consump- 
tion of  iron.  We  should,  moreover,  have  had  509  steam- 
engines  to  apply  to  other  work.  We  should  have  saved 
$18,000,000  worth  of  coal,  charcoal,  and  coke  for  other 
uses,  and  we  should  have  left  4,000,000  tons  of  iron-ore  in 
the  ground  for  those  who  come  after  us  to  use  when  they 
can  do  it  profitably." 

Without  stopping  to  note  the  minor  suggestions  of 
false  inferences  and  assumptions  which  the  extract  con- 
tains, without  pausing  to  be  told  to  what  "  other  work " 


254  PROTECTION  VS.   FREE  TRADE. 

the  509  steam-engines  could  be  applied  (for  we  never  sliall 
be  told),  for  what  "■  other  uses  "  the  coke  and  coal  could 
be  saved,  and  when  and  under  what  conditions  the  iron- 
ore  could  be  "profitably"  used — and  how  much  longer 
the  human  family  should  leave  all  this  treasure  untouched 
— and  the  failure  to  credit  the  total  annual  product  of  the 
nation's  industry  with  the  total  exchange  value  of  the 
2,000,000  tons  of  pig-iron  (worth  $40  per  ton  in  1869), 
$80,000,000 !— all  of  which  was  distributed  within  the 
country  to  wages  and  capital — we  remand  the  paragraph  to 
the  class  of  fallacies  to  which  it  belongs. 

If  there  were  no  political,  moral,  governmental  reasons 
compelling  the  independence  of  this  nation  of  other  na- 
tions, for  the  supply  of  a  staple  like  iron,  reasons  of  an 
industrial,  educational,  or  military  nature,  and  we  pro- 
ceeded on  the  mere  economic  notion  to  get  the  little  iron 
a  purely  agricultural  people  required,  we  may  admit  that 
we  should  have  got  it  cheaper  abroad,  temporarily  at  least. 
That  is,  if  this  want  of  iron,  to  be  had  in  no  other  way, 
had  induced  us  to  import  it  to  the  exclusion  of  some  other 
kind  of  commodities,  we  should  have  got  it  cheaper  by 
exporting  something  in  which  we  had  greater  advantages 
of  production.  But  when  the  "  desire  "  for  iron  takes  its 
place  in  the  catalogue  of  other  "desires,"  which,  in  the 
aggregate,  overmastered  our  purchasing  power,  we  then 
proceed  to  procure  it  and  them  in  the  only  way  which  will 
result  in  supplying  them  all.  We  produce  the  things  we 
can,  and  import  the  things  we  must,  according  to  the 
strength  of  our  desires  and  needs. 

Prof.  Sumner  has  simply  treated  the  group  of  iron- 
makers  on  the  atomistic  plan.  Instead  of  the  individual, 
he  has  taken  a  class.  As  the  only  class,  and  by  itself,  we 
should  have  got  its  products  cheaper  (at  least  temporarily), 
by  importation.     As  a  single  desire,  it  was  satisfied  (tem- 


SCHEDULE   A— PRODUCTION   UNDER  FREEDOM.  £55 

porai'ily,  at  least)  at  less  effort  by  exchange.  As  one  of 
the  aggregate  of  desires  amounting  to  $3,000,000,000,  it 
could  only  be  gratified  at  the  expense  of  some  other  satis- 
faction, more  or  less  urgent.  The  nation  takes  its  choice 
of  imported  satisfaction  up  to  $700,000,000.  It  can  put 
iron  among  them  if  no  other  considerations  prevail.  If 
other  considerations  do  intervene,  it  produces  it  under  the 
best  conditions  available. 

It  remains  to  provide  $2,200,000,000  for  the  satisfaction 
of  desires  for  which  we  have  no  recourse  but  domestic  re- 
sources and  domestic  labor.  We  have  been  driven  to  a 
rather  laborious,  but  we  think  conclusive  demonstration, 
that  seven  eighths  of  the  goods  made  in  what  are  called 
"  protected  industries  "  must  be  made  in  the  United  States. 
They  must,  of  course,  be  made  under  the  conditions  of  re- 
turns to  American  capital  and  labor.  The  cost  of  all  to 
the  consumer  here  will  be  the  cost  of  making  the  most  ex- 
pensive portion.  This  is  a  law  which  it  can  not  be  possible 
that  we  ought  to  stop  now  to  demonstrate,  and  human 
legislation  is  powerless  to  repeal  it.  It  is  the  well-known 
and  undisputed  law  on  which  rent  arises.  I^or  is  it  neces- 
sary to  hold  with  Ricardo  that  rent  is  the  price  paid  for 
the  "  original  and  indestructible  power  of  the  soil " — it  may 
well  be  due  to  the  development  of  the  human  community 
inhabiting  that  soil — it  is  the  price  of  so  much  "  space," 
which  is  also  an  instrument  of  production,  limited  in  extent 
and  in  exclusive  ownership.  It  is  a  payment  for  "  sjDace," 
as  Mr.  Carey  puts  it,  "because  of  its  nearness  to  the  so- 
cietary  movement."  But  the  principle  that  when  the  whole 
of  a  given  product  is  necessary  to  supply  the  demand,  the 
price  of  the  whole  will  be  the  cost  of  the  most  costly  pro- 
portion, can  not  be  denied.  It  will  be  found  laid  down  in 
any  text-book.^    In  the  nature  of  things  this  must  be  so,  oth- 

'  Commenting  on  Ricardo's  law  of  rent,  Prof.  Perry  says :  "  The  Ricardo 


256  PROTECTION    VS.   FREE   TRADE. 

erwise  the  most  costly  portion  would  not  be  produced.  Tlie 
producers  of  the  least  costly  portion  make  a  greater  profit, 
and  they  may  or  may  not  reduce  prices.  The  cost,  then,  to 
the  consumer  of  goods  made  partly  under  American  and 
partly  under  European  conditions,  would  not,  in  the  long 
run,  be  reduced  by  foreign  trade.  Either  the  importer 
does  or  does  not  reduce  his  prices.  If  he  does  not,  the 
protective  tax,  costs  the  consumer  nothing.  If  he  does,  he 
drives  the  home  manufacturer  out  of  business  and  into 
something  else.  In  the  first  case  we  get  the  whole  supply 
on  the  American  tei-ms,  which  "  freedom  "  will  not  make 
less  onerous.  In  the  second  case  we  go  without  the  goods. 
The  problem  is  to  get  some  one  to  make  the  seven  eighths 
of  .the  goods  we  must  have,  made  at  home.  Prof.  Sumner, 
David  A.  Wells,  Henry  J.  Philpot,  Frank  Hurd,  and  Thomas 
G.  Shearman,  et  id  omne,  need  their  share,  but  I  see  no 

law  of  rent  lost  most  of  its  significance  and  the  simple  truth  remained,  ap- 
plicable to  all  products  that  have  a  market  rate,  that  the  rate  must  be  presup- 
posed to  be  sufficient  to  meet  the  cost  of  that  portion  produced  with  the  greatest 
difficulty^  othericise  that  portioji  would  not  be  produced  cd  all.''''  ("Political 
Economy,"  p.  241.) 

"  In  order  to  estimate  the  influence  of  this  fact  upon  price,  we  must  dis- 
tinguish between  those  commodities,  the  cheapest  manner  of  the  production 
of  which  may  be  extended  at  pleasure,  and  those  in  the  production  of  which  it 
is  necessary,  in  order  to  satisfy  the  aggregate  want  of  them,  to  call  in  the  dear- 
est mode  of  production  to  aid  the  cheapest.  In  the  former  instance  the  price 
of  commodities  is  naturally  regulated  by  the  least  cost  of  production.  .  .  . 

"  If  the  same  laws  were  applicable  in  the  latter  case,  producers  placed  in 
a  less  favorable  situation  "  (and  high  wages  puts  the  American  producer  in  a 
less  favorable  situation)  "  would  be  compelled  to  immediately  abandon  the 
market.  The  market,  in  consequence,  would  no  longer  be  able  to  provide  for 
the  aggregate  need ;  and  the  price  of  the  commodity  would  continue  to  rise 
until  the  producers  who  had  been  driven  from  the  market  returned  to  it  again. 
Hence,  here,  the  price  in  the  long  run  is  determined  by  the  cost  of  production 
of  the  commodity,  produced  under  the  least  advantageous  conditions,  while  such 
production  is  necessary  in  order  to  satisfy  the  aggregate  need.''''  (Roschcr, 
"  Politcal  Economy,"  sec.  110.)  In  other  words,  we  here  must  depend  on  our 
own  condition  of  production  for  the  greater  portion  of  our  aggregate  needs. 


SCHEDULE   A— PRODUCTION   UNDER  FREEDOM.  257 

proposal  on  their  part  to  undertake  tlieir  manufacture  on 
European  terms,  or  "  under  freedom."  la  tnith,  we  are 
simply  back  to  Mr.  Mill's  proposal  of  the  protective  tax  as 
the  easiest  way  out  of  it.  What  has  occurred,  and  what  will 
occur,  is  the  uncertainty,  fluctuations,  and  ruin  which  peri- 
odically overtake  the  American  labor  and  capital  which 
is  subject  to  such  competition,  and  the  consequent  failure 
to  get  the  goods  at  all.  We  can  not  escape  "  competition," 
for  we  are  making  the  same  goods  for  the  same  market. 
If,  then,  at  last,  the  far  greater  portion  of  the  manufactured 
goods  we  consume  must  be  made  at  home  under  our  con- 
ditions, and  the  laws  of  cost  of  production  here,  the  whole 
market  may  as  well  be  given  at  once  to  our  own  workmen. 
To  the  whole  consumption  the  American  production  must 
contribute  the  larger  portion.  "  Inundations  of  cheap  goods," 
"  bankruptcy,"  and  "  fire-damaged  bargains,"  are  not  a  nor- 
mal or  reliable  source,  either  of  supply  or  cheapness.  It 
would  not  seem  possible  that  any  elaborations  of  argument 
or  illustrations  are  needed  to  strengthen  this  statement. 
The  whole  significance  of  the  situation,  and  the  whole 
philosophy  of  protection  as  well,  was  summed  up  by  John 
C.  Calhoun  in  his  speech  on  our  second  tariff  act  of  1816 : 
"  The  cotton  and  woolen  manufactures  are  not  to  be  intro- 
duced, they  are  already  introduced  to  a  great  extent,  free- 
ing us  entirely  from  the  hazards  and,  in  a  great  measure, 
the  sacrifices  experienced  in  giving  the  capital  of  the  coun- 
try a  new  direction.  .The  restrictive  measures  and  the  war, 
though  not  intended  for  that  purpose,  have,  hy  the  necessary 
operation  of  things^  turned  a  large  amount  of  capital  to 
these  new  branches  of  industry.  But  it  will  no  doubt  be 
said,  if  they  are  so  far  established,  and  if  the  situation  of 
the  country  is  so  favorable  to  their  growth,  where  is  the 
necessity  of  affording  them  protection  ?  It  is  to  put  them 
ieyond  the  reach  of  contingency.^^ 


258  PEOTECTION  VS.   FKEE  TRADE. 

Since  the  Revolutionary  War  there  has  been  no  day 
when  the  people  of  the  United  States  have  not  stood  in 
need  of  the  domestic  manufacture  for  the  greater  propor- 
tion of  the  supply  of  its  manufactured  goods.  They  have 
always  been  under  tlie  necessity  of  using  an  aggregate,  the 
greater  portion  of  which  was  supplied  under  our  own  con- 
ditions of  remuneration  to  labor  and  capital.  This  has 
been  "  the  necessary  operation  of  things  here,"  and  manu- 
factures were  natwal  to  us.  It  was  as  well  to  put  them 
"  beyond  the  reach  of  contingency  "  first  as  last ;  otherwise 
their  introduction  nmst  depend,  as  John  Kae  says,  "  on  the 
miscarriage  of  early  projectors,"  or,  as  Mr.  Mill  puts  it : 
"  But  it  can  not  be  expected  that  individuals  should  at  their 
own  risk,  or  rather,  to  their  certain  loss,  introduce  a  new 
manufacture,  and  bear  the  burden  of  carrying  it  on,  until 
the  producers  have  been  educated  up  to  the  level  of  those 
with  whom  the  processes  are  traditional.  A  protective 
duty,  continued  for  a  reasonable  time,  will  sometimes  be 
the  least  inconvenient  mode  in  which  a  nation  can  tax  it- 
self for  the  support  of  such  an  experiment." 

And  this,  without  adverting  to  the  powerful  operation 
of  the  vis  inertia  of  custom,  which,  as  Prof.  Sidgwick  re- 
marks, "  is  no  less  liable  to  maintain  the  importation  from 
abroad  of  goods  which  might  be  advantageously  produced 
in  the  proximity  of  their  market,  than  it  is  to  keep  any 
other  part  of  the  process  of  production  in  an  economically 
backward  condition."  ^ 

'  In  this  connection  it  may  be  interesting  to  note  what  "  an  instructor  in 
political  economy  in  Harvard  College"  says:  "There  are  two  sets  of  condi- 
tions under  which  it  is  supposable  that  advantages  not  natural  or  inherent 
may  be  found  in  one  country  as  compared  with  another,  under  which  merely 
temporary  and  accidental  causes  may  permit  the  use  of  certain  branches  of 
industry  in  the  second  country,  and  under  which,  therefore,  there  may  be 
room  for  the  application  of  protection.  These  arc,  first,  the  state  of  things 
in  a  new  country  which  is  rapidly  growing  in  population,  and  in  which,  as 


SCHEDULE  A— rnODUCTION  UNDER  FREEDOM.    £59 

And  it  is  a  tax  only  wlien  prices  are  considered  in  tlie 
period  wlien  we  are  undersold  bj  the  foreign  maker,  for 
the  sake  of  the  destruction  of  the  domestic  industry,  with 
the  expectation  of  making  good  losses  by  subsequent  con- 
trol of  the  market  and  advance  of  j^rices.  The  truth  is,  no 
human  being  knows  what  foreign  goods  would  cost  under 
free  trade  and  with  no  manufactures  here. 

Mr.  Sumner  thinks  the  forces  of  labor  and  capital  com- 
mitted to  an  industry  are  like  the  water  in  the  reservoir 
which  supplies  the  city.  It  may  be  turned  on  and  turned 
off  at  pleasure — now  here,  now  there — or  need  not  be 
used  at  all,  at  your  option.  But  capital  and  labor  are 
not  aggregates  of  pure  force  in  any  such  sense.^  Hence 
the  Professor,  in  dealing  with  our  epoch  of  1816,  says 
("Protection  in  the  United  States,"  p.  39):  "Evidently 
we  can  not  understand  these  tilings  without  taking  into 

population  becomes  more  dense,  there  is  a  natural  change  from  exclusive  de- 
votion to  the  extractive  industries  toward  greater  attention  to  those  branches 
of  production  classed  as  manufactures.  The  transition  from  a  purely  agri- 
cultural state  to  a  more  diversified  system  of  industry  may,  in  a  complete  ab- 
sence of  other  occupations  than  agriculture,  be  retarded  beyond  the  time 
when  it  might  advantageously  take  place.  Secondly,  when  great  improve- 
ments take  place  in  some  of  the  arts  of  production,  it  is  possible  that  the 
new  processes  may  be  retained  in  the  country  in  which  they  originate,  and 
may  fail  to  be  applied  in  another  country,  through  ignorance,  the  inertia  of 
habit,  and  perhaps  in  consequence  of  restrictive  legislation  at  the  seat  of  the 
new  methods."  (F.  W.  Taussig, in  "Protection  to  Young  Industries,"  p.  11.) 
'  This  is  adverted  to  by  Prof.  Ely :  "  A  further  hypothesis  was  the  ab- 
solute lack  of  friction  in  economic  movements.  Not  only  do  capital  and  labor 
move  with  perfect  ease  from  place  to  place  and  from  employment  to  employ- 
ment, but  this,  it  was  implicitly  maintained,  is  accomplished  without  the 
slightest  loss.  The  silk  manufacturer  diverts  his  capital  into  another  employ- 
ment, like  the  construction  of  locomotives,  with  precisely  the  same  facility 
with  which  he  turns  his  family  carriage-horse  from  an  avenue  into  a  cross- 
street,  while  the  Manchester  laborer,  on  a  moment's  warning,  finds  a  suitable 
purchaser  for  his  immovable  effects,  and,  without  expense  or  loss  of  time, 
transfers  himself  to  London,  where  employment  is  at  once  offered  him  at  the 
rate  of  wages  there  current." 


260  PROTECTION  VS.   FREE  TRADE. 

account  the  movements  whicli  were  going  on  in  other  in- 
dustrial nations,  but  the  popular  opinion  liere  was  that  the 
English  had  set  out,  by  a  sacrifice  of  some  millions'  worth 
of  goods,  to  destroy  American  manufactures.  This  belief 
had  deep  root,  and  perhaps  has  only  lately  died  out,  since 
we  have  ceased  to  hear  cries  of '  British  gold,'  whenever  any 
one  spoke  of  free  trade.  The  notion  I  have  referred  to  re- 
ceived strong  re-enforcement  from  a  remark  of  Brougham's 
which  you  may  find  quoted  in  the  first  popular  protection- 
ist's work  you  choose  to  take  up,  in  which  he  recommended 
his  countrymen  to  reconquer  the  American  market.  If  he 
meant  to  propose  to  them  to  sacrifice  their  capital  in  giving 
several  millions'  worth  of  goods  to  the  Americans  in  order 
to  destroy  factories  which  icoxild  spring  up  again  the  mo- 
ment they  tried  to  reimburse  themselves,  they  would  have 
been  the  first  to  laugh  at  him." 

The  historical  fact  is  that  destroyed  factories  do  not 
thus  spring  up  again,  without  defensive  duties.  And  Eng- 
lish human  nature,  or  rather  the  human  nature  of  Man- 
chester capital,  is  in  pretty  effective  action  yet.  Here  is  a 
citation  from  an  official  report  on  strikes,  of  a  Committee 
appointed  by  Parliament  and  made  to  Parliament  in  1854. 
This  ^\•ill  also  probably  continue  to  appear  in  any  "  popular 
protectionist's  work  " : 

"  I  believe  that  the  laboring  classes  generally  in  the 
manufacturing  districts  of  this  country,  and  especially  in 
the  iron  and  coal  districts,  are  very  little  aware  of  the  ex- 
tent to  which  they  are  often  indebted  for  their  heing  em- 
ployed at  all,  to  the  immense  losses  which  their  employers 
voluntarily  incur  in  bad  times  in  order  to  destroy  foreign 
competition,  and  to  gain  and  keep  possession  of  foreign 
markets.  Authentic  instances  are  well  known  of  employ- 
ers "  (the  report  is,  of  course,  dealing  with  English  employ- 
ers) "  having  in  such  times  carried  on  their  works  at  a  loss 


SCHEDULE  A— PRODUCTION  UNDER  FREEDOM.  2G1 

amounting  in  the  aggregate  to  tliree  or  fonr  limidred  thou- 
sand pounds  in  as  many  years.  If  the  efforts  of  those  who 
encouraire  the  combination  to  restrict  the  amount  of  labor 
and  to  produce  strikes  were  to  be  successful  for  any  length 
of  time,  the  great  accumulations  of  cajyital  could  no  longer 
be  made  which  enable  a  few  of  the  most  wealthy  capital- 
ists to  overwhelm  all  foreign  competitors  in  times  of  great 
depression,  and  thus  to  clear  the  loay  for  the  whole  tr^ade 
to  step  in  when  prices  rise,  and  to  carry  on  a  great  busi- 
ness before  foreign  capital  can  again  accumulate  to  estab- 
lish a  competition^  \T^  prices  with  any  chance  of  success. 
The  large  capitals  of  this  country  are  the  great  instru- 
ments of  loarfare  against  the  competing  capitals  of  other 
countries,  and  are  the  most  essential  instruments  now  re- 
maining by  which  our  manufacturing  supremacy  can  be 
maintained;  the  other  elements— cheap  labor,  abundance 
of  raw  materials,  means  of  communication,  and  skilled 
labor — being  rapidly  in  progress  of  being  equalized." 

Why  will  not  the  scientists  who  hold  that  "an  eco- 
nomic investigation  may  be  carried  on  independently  "  take 
scientific  notice  of  the  sociological  forces  which  wield  the 
economic  ones  ? 

This  theory  takes  no  account  of  the  organization  through 
which  the  productive  forces  must  operate.  "When  the  flow 
is  from  the  foreign  reservoirs  through  the  channel  of  for- 
eign trade,  the  flow  from  the  domestic  reservoirs  must 
cease.  Bear  in  mind  we  are  dealing  with  competitive  in- 
dustries. "  Springing  up  again  "  is  a  very  good  thing,  but 
it  is  not  met  with  in  practice.  Henry  Clay  impatiently 
disposed  of  it  as  a  patent  fact  (speech.  House,  March, 
1821) :  "  I^ow  I  contend  that  this  proposition  "  (that  manu- 
factures will  in  due  time  spring  uj))  "  is  refuted  by  all  ex- 
perience, ancient  and  modem,  in  all  countries.  If  I  am 
asked  why  unprotected  industry  should  not  succeed  in  a 


262  PROTECTION    VS.  FREE   TRADE. 

struggle  witli  protected  industry,  I  answer,  the  fact  has  ever 
been  so,  and  that  is  sufficient.  I  reply  that  uniform  expe- 
rience evinces  that  it  can  not  succeed  in  such  a  struggle, 
and  that  is  sufficient.  If  we  speculate  on  the  causes  of 
this  universal  truth,  we  may  differ  about  them.  Still,  the 
undeniable  fact  remains." 

But  it  is  easily  accounted  for.  The  assumption  over- 
looks in  toto  the  organization  by  means  of  which  modern 
industries  are  carried  on.  It  overloolvs  the  structure  through 
which  functions  are  discharged.  If  the  function  ceases  (as 
it  does  when  the  foreign  supply  is  on),  the  structure  de- 
generates. It  simply  becomes  atrophied  in  accordance 
with  well-known  laws  in  organic  life.  The  structm*e  is  the 
joint  adjustment  of  capital  and  labor  co-ordinated  to  a  com- 
mon end.  "When  then  the  function  ceases — that  is,  when  the 
work  stops — labor  must  disband  and  go  elsewhere.  Labor 
must  take  itself  to  a  market  at  once,  or  perish ;  a  day's 
w^ork  to  it  lost  now  is  lost  forever.  Capital  necessarily  fol- 
lows. If  not  destroyed,  it  is  paralyzed  in  rust,  friction, 
and  disuse. 

The  aggregate  consumption  is  a  reservoir  holding  2,800,- 
000,000  gallons.  Certain  pipes  can  deliver  350,000,000 
gallons,  and  certain  others  2,400,000,000.  The  mechanism 
is  such  that  when  the  350,000,000  run  freely,  the  2,400,- 
000,000  stop.  If  either  is  to  stop,  which  one  do  our  inter- 
est and  welfare  dictate  we  shall  prefer  ?  To  ask  this  ques- 
tion is  to  answer  it. 

We  see,  then,  upon  what  an  utter  perversion  of  the 
facts  "  Schedule  A  "  is  based.  The  protective  tax  does  not 
add  a  sou  marque  to  the  cost  of  the  $2,440,502,647  worth 
of  goods  made  at  home.  They  are  a  necessary  part  of  the 
whole  supply,  and  must  cost  the  price  of  producing  the 
most  expensive  portion.  The  protective  tax  partly  raises 
the  price  of  the  imported  commodity,  but  not  to  the  f  uU 


SCHEDULE   A— PRODUCTION   UNDER   FREEDOM.  263 

amount  of  the  tax,  and  in  many  articles  it  adds  nothing. 
A  jprotective  tax  simjoly  covers  the  difference  in  cost  of 
production,  but  the  whole  tax  in  the  foreign  commodity 
goes  into  the  public  treasury,  and  besides  saves  the  do- 
mestic industry ;  the  final  result  of  which  is  the  whole  sup- 
ply of  our  whole  natural  demand  at  the  lowest  cost  to  our 
people — the  lowest  cost  which  our  relations  to  the  world 
permits. 

The  abundance  of  commodities  which  Americans  are 
to  consume  lies  spread  before  us  in  the  richness  and  prodi- 
gality of  nature  in  field,  forest,  mines,  rivers,  and  seas. 

Their  cheapness  depends  on  the  skill  and  fidelity  with 
which  we  overcome  the  obstacles  which  nature  alone  offers 
to  us.  We  have  no  false  starts  to  recover,  no  false  tra- 
ditions to  reverse,  no  false  institutions  to  overthrow.  The 
safe,  independent,  manly,  and  heroic  course  is  to  accept 
the  challenge  nature  offers.  We  formulate  our  demands  on 
nature,  and  ask  nothing  of  government  but  that  it  keep 
foreign  product  off  our  backs,  that  it  applies  laissez  faire 
to  ourselves,  and  "hands  off"  to  all  other  nations.  Na- 
ture's returns  are  unfailing,  her  markets  are  never  in  a  state 
of  glut ;  we  need  never  depend  for  "  bargains  "  on  "  bank- 
ruptcy "  or  "  some  fire-damaged  goods." 

Their  distribution  depends  on  the  just  and  fair  rewards 
for  services  rendered,  under  Nature's  own  law  of  supply 
and  demand,  superintended  and  re-enforced  by  the  decrees 
of  a  strong,  highly  civilized,  and  well-governed  state.  The 
•  state  is  not  something  external  to  the  worker,  with  a  pur- 
pose foreign  or  hostile  to  him.  The  individual  is  not  the 
creature  of  status,  but  lives  under  a  dispensation  of  free 
contract.  Human  laws  do  not  infringe  on  his  freedom. 
His  only  constraint  comes  from  the  finer  and  wider  in- 
stincts of  humanity  imposed  by  the  social  movement,  un- 
folded under  the  laws  of  its  divine  evolution  and  progress. 


264  PKOTECTIOX  VS.   FREE  TRADE. 

Tliere  is  crime  and  overreacliing,  and  tlie  exploitation  of 
labor  inseparable  from  human  society,  under  free  trade  as 
^vell  as  under  protection.  But  each  man  has  a  chance  to 
win  "wealth"  or  the  "satisfaction  of  desires."^ 

He  wins  it  by  the  application  of  his  own  faculties  to 
American  physical,  political,  and  moral  conditions.  He 
does  not  "  make  it  out  of  anybody  else." 

It  results,  then,  that  the  achievements  and  satisfactions 
of  so  highly  differentiated  a  nation  as  the  United  States 
must  be  won  by  its  own  people  on  its  own  soil.  They  cost 
effort,  but  the  effort  is  reduced  to  a  minimum.  Under 
free  trade,  we  could  not  win  from  nature.,  here.,  anything 
at  a  less  cost  in  labor  and  abstinence  ',  and  it  is  settled  that 
we  can  not  buy  our  satisfaction. 

To  call  this  cost  a  tax  may  please  an  economist  fond  of 
antitheses.  But  it  is  hardly  worth  while  to  carry  on  a  con- 
troversy with  any  one  who  seriously  insists  on  the  identity 
of  such  antipodal  things. 

It  appears,  then,  that  some  of  us,  a  number  whose  de- 
sires, when  taken  individually  or  in  groups,  did  not  cost  in 
satisfaction  more  than  $700,000,000,  could  buy  their  satis- 
faction by  exchanges  in  a  foreign  market,  provided  always 
that  the  whole  number  could  be  fully  employed  in  the 
most  advantageous  industries,  and  provided  the  foreign 
market  continued  to  take  the  surplus  we  offer  for  sale  and 
the  surplus  we  wish  to  buy.  The  trouble  is,  that  our  de- 
sires increase  faster  than  the  capacity  of  the  foreign  mar- 
ket. It  appears  also  that  when  all  of  ns,  just  as  we  are, 
undertake  to  satisfy  our  desires  by  exchanges  in  the  foreign 

'  It  sounds  harsh,  but  the  author  of  "  What  Social  Classes  owe  to  each 
other "  says  truly :  *'  We  each  owe  it  to  the  other  to  guarantee  rights. 
Rights  do  not  appertain  to  results,  but  only  to  chances.  They  pertain  to  the 
conditioivi  of  the  struggle  for  existence,  not  to  any  of  the  results  of  it ;  to 
the  pursuU  of  happiness,  not  to  the  possession  of  it." 


SCHEDULE  A— rRODUCTION  UNDER  FREEDOM.  265 

market,  we  fall  $2,200,000,000  short  annually.  AA^c  fall 
back  then  on  the  domestic  production,  in  which  no  owner 
of  labor  or  capital  hands  over  to  another  anything  over  and 
above  that  which  that  other's  services  are  entitled  to,  under 
the  laws  of  supply  and  demand,  operating  equably,  fully, 
and  fairly  throughout  the  entire  held  of  industries. 

The  Government  here  has  never  constrained  the  citizen 
to  do  that  which  even  might  have  been  better  for  him.  It 
has  never  invaded  the  liberty  of  any  citizen  to  buy  what  he 
pleased  and  sell  when  he  pleased.^  And  so  it  has  resulted 
that,  according  to  our  respective  desires,  we  go  on  and  im- 
port iron  and  sugar,  steel  and  velvets,  figs  and  India  shawls, 
china-ware  and  Persian  dates,  silks  and  seltzer-water,  wines 
and  nutmegs,  wool  and  coffee,  tea  and  London-made  hats, 
raw-hides  and  sahcylic  acid,  until  the  aggregate  reaches  the 
$700,000,000.  The  trade  then  stops,  or  ought  to  stop. 
If  we  go  further,  we  export  our  bulUon.  If  we  still  go  on 
we  get  hopelessly  in  debt,  and  banlcruptcy  ensues  upon  in- 
activity thus  enforced.  What  stops  the  trade  ?  Protect- 
ive taxes  ?  JSTo.  The  trade  ceases  because  we  have  ex- 
hausted our  salable  exports.  "We  are  locked  up  in  the 
equation  of  international  demand.  "  Every  transaction  in 
commerce  is  an  independent  transaction."  The  traders 
who  send  out  the  exports  are  not  the  ones  who  bring  in  the 
imports,  but  in  due  time,  each  going  his  own  way,  they 
are  both  brought  to  bay  by  the  balance  of  trade — the  par 
of  exchange  is  against  us,  specie  goes  out,  and  we  can  only 
resume  the  operation  when  commodities  may  again  be  paid 
for  by  commodities.  Two  very  promising  apothegms  of 
Prof.  Perry  disappear  in  the  test :  "  Man  is  man,  motive 
is  motive,  and  exchange  is  exchange."  "  Free  trade  does 
not  compel  anybody  to  trade,  does  not  even  recommend 

'  The  only  exception  is  the  purchase  of  ships  abroad. 
13 


206  PROTECTION    VS.  FREE   TRADE. 

anybody  to  trade,  it  merely  allows  those  to  trade  wlio  tliink 
it  for  tlieii'  advantage." 

Man,  motive,  and  exchange  are  all  submerged  in  tlie 
law  of  international  balances — the  antecedent  law  of  supply 
and  demand.  As  things  are,  we  stop  on  the  exchange  of 
the  $700,000,000.  "  Free  trade"  does  not  even  allow  the 
trade  except  in  strict  subordination  to  that  law :  nor  is 
this  the  old  hete  iioir  of  "  the  mercantile  system."  ^ 

What  "  Schedule  A  "  tends  to  prove,  if  its  figures  were 
correct,  is  this :  If  we  could  buy  and  import  the  whole 
$433,173,335  +  $2,440,502,047  =  $2,873,075,984  worth  of 
foreign  goods,  and  provided  our  exports  exchanged  at  pres- 
ent prices  and  the  imports  cost  no  more  than  now,  we 
should  save  $550,933,037,  and,  ecoiiomiccdly,  it  would  be  a 
judicious  operation.  "We  concede  nothing  of  its  moral  and 
physical  effects.  Bat  we  have  seen  how  the  "  if  "  stands 
for  an  impossibility  in  the  trade,  and  the  "  provided  "  rep- 
resents an  adverse  change  in  values,  ruinous  and  fatal 
to  us. 

What  "  Schedule  A  "  actually  makes  clear  and  evident 
is  the  impossibility  of  procuring  the  commodities  in  any 
mode  except  by  direct  production.  There  is  no  other  way 
to  get  them,  and  we  can  not  do  without  them.  The  cost 
of  their  use  and  consumption  is  the  tax  imposed  on  us  for 
being  a  highly  diilerentiated  organism,  a  highly  civilized 

'  "  In  this  manner  new  light  has  been  thrown  upon  our  studies,  and  we 
learn  that  our  fathers  have  been  wiser  than  we  have  been  inclined  to  think, 
and  that  it  has  not  been  reserved  for  our  day  to  discover  all  that  is  good  and 
true  in  the  economic  life  of  nations,  A  concrete  example  of  the  fruits  of  this 
new  method  is  found  in  the  almost  complete  reversal  of  opinion  concerning 
the  policy  advocated  by  those  we  call  Mercantilists.  It  is  now  acknowledged 
that  they  were,  on  the  whole,  very  shrewd,  sensible  men,  whereas,  not  long 
since,  doctrines  and  measures  were  attributed  to  them  which  would  lead  one 
to  suppose  it  necessary  to  go  back  only  two  hundred  years  to  discover  man 
with  a  caudal  appendage." — Prof.  Ely. 


SCHEDULE  A— PRODUCTION  UNDER  FREEDOil.    2G7 

people — tlie  tax  is  tlie  penalty  of  being  a  vertebrate  instead 
of  a  mollusk.  Tliat  is  all  there  is  of  it.  I  tMnk  protection- 
ists ought  to  thank  Mr.  Springer  for  "  Schedule  A." 

If  any  farmer  or  manufacturer  or  transporter  is  appro- 
priating more  than  his  share  of  the  ^556,938,637,  it  is  not 
m  pursuance  of  any  human  statute.  If  one  citizen  is  col- 
lecting taxes  of  another  citizen,  under  this  state  of  the 
facts,  it  must  be  in  accordance  with  the  divine  ordinance 
under  which  society  is  moving  to  its  fulfillment. 

We  are,  therefore,  entitled  to  answer  "the  political 
question  about  protection  :  Does  the  statute  enacted  by  the 
legislature  alter  the  distribution  of  j!?ro/7<?r^?/  so  that  one 
man  enjoys  another  mail's  earnings?  Has  the  state  a 
law  in  operation  which  enables  one  citizen  to  collect  taxes 
of  another  f  "  with  a  clear  and  demonstrated  negative. 

And  we  can  answer  "  the  popular  question  about  pro- 
tection :  Does  it  prevent  me  from  supporting  myself  and 
my  family  by  my  labor  as  well  as  I  could  if  there  were 
no  ^j)7'6»^ec^2'i'6  tax?"  with  an  equally  emphatic  negative. 
You  are  supporting  yourself  and  your  family,  with  your 
standard  of  life,  by  less  exertion  than  in  any  other  country, 
and  you  could  not  increase  the  ratio  of  your  comfort  and 
happiness  to  your  labor  and  sacrifice  by  exchanges  made  in 
any  market  on  the  face  of  the  earth.  Ton  can  go  without 
the  satisfaction  of  your  desires,  but  you  can  not  buy  them 
outside  of  the  United  States. 

And,  now,  inasmuch  as  it  is  natural  to  have  the  men 
who  work  for  ns,  work  on  this  side  of  the  Atlantic,  espe- 
cially as  they  work  on  the  same  materials,  with  the  same 
tools,  and  with  the  same  skill,  let  the  free-trader  give  us 
the  reasons  for  having  our  workshops  on  the  other  side  of 
the  ocean.  The  burden  of  proof  is  on  him,  if  he  changes 
this  natural  order,  to  establish  these  three  propositions : 
First,  that  free  trade  would  increase  the  total  annual  prod- 


2GS  PROTECTIOX    VS.   FREE  TRADE. 

net  of  the  nation's  industry ;  second,  that  it  would  more 
equitably  distribute  tlie  total  ju-oduct ;  third,  that  a  de- 
creased total  product  would  exchange  for  a  total  of  com- 
modities equal  to  and  as  equitably  distributed  as  the  total 
product  under  protection. 

There  are  four  alternative  conditions  under  which  we 
may  attempt  to  procure  the  consumable  goods  indispensa- 
ble and  desirable  to  us,  or  rather  in  which  we  may  adjust 
the  supply  of  them  to  our  demand  for  them — in  which  we 
may  bring  our  desires  and  their  satisfaction  into  conformity 
to  each  other,  We  can  not  buy  them  to  the  amount  of 
83,000,000,000.  We  can,  then,  first  lessen  the  demand— 
the  "  desires."     AVe  can  do  this  either — 

1.  By  exterminating  the  people  who  entertain  these 
various  and  costly  desires,  and  the  human  beings  who  are 
living  under  their  dominion. 

This  will  scarcely  be  regarded  as  feasible,  in  view  of 
the  progress  we  have  made  in  Christian  civilization. 

2.  By  eliminating  the  desu-es  themselves. 

This  has  been  done  successfully  in  Tyre,  and  Sidon,  and 
Carthage,  and  Ireland,  and  Spain,  and  Egypt,  and  Poland, 
Great  people  have  lost  their  energy  by  their  failure  to  reap 
returns  for  its  exercise.  The  pressure  of  external  social 
and  commercial  systems  has  produced  despair,  and  they 
have  disappeared  from  the  arena  of  human  contentions. 
They  Avork  no  effective  demand  for  commodities,  for  they 
bring  no  purchase-money  in  their  hands.  The  hungry  boy 
gazing  in  the  pastry-cook's  window  makes  no  demand  for 
tarts  without  the  penny  in  his  hands.  If  the  struggle  to 
procure  the  penny  becomes  hopeless,  he  will  in  time  lose 
his  hankering  after  tarts,  and  his  desire  for  tarts  will  be 
diminished.     He  is  then  rid  of  that  source  of  taxation. 

Second :  We  can  procure  the  supply,  the  "satisfaction," 
either — 


SCHEDULE  A— rRODUCTION  UNDER  FREEDOM.         269 

1.  By  tlie  process  of  direct  production,  under  a  pro- 
tective or  prohibitory  tariff,  as  we  have  had  experience  in 
the  United  States  for  a  hundred  years  ;  or, 

2.  By  the  process  of  indirect  production,  through  ex- 
changes made  abroad  under  free  foreign  trade. 

The  latter  is  the  scheme  commended  to  us  by  the  advo- 
cates of  theoretical,  scientific,  orthodox,  Manchesterian  free 
trade. 

It  remains  to  examine  its  practical  application  to  the 
actual  facts  as  they  exist  in  the  United  States. 

We  are  now  to  produce  "under  freedom" — freedom 
not  only  between  the  50,000,000  of  us  who  have  acce2)ted 
the  duties  and  burdens,  along  with  the  privileges  of  Ameri- 
can citizenship,  but  freedom  for  all  the  world  to  come  and 
go  from  our  harbors  and  docks.  We  are  to  breathe  that 
metaphysical  entity  which  is  longingly  spoken  of  as  "  the 
air  of  commercial  freedom."  Let  us  analyze  it,  and  see 
whether  it  will  exhilarate  us  or  asphyxiate  us. 

We  are  supposed  to  have  completed  the  exchanges  of 
the  $700,000,000  of  products  in  which  we  are  not  in  com- 
petition— products  of  dissimilar  kinds;  we  have  put  off 
upon  the  foreigner  all  the  products  in  the  production  of 
which  wages  are  high — either  all  we  have  to  spare,  or  all 
he  cares  to  take.  We  now  accept  the  competition  which 
is  forced  upon  us  and  which  we  can  not  evade,  in  the  joint 
effort  with  all  the  world,  to  produce  $2,200,000,000  of 
similar  products,  to  be  sold  in  the  same  market,  to  wit,  our 
own  domestic  market. 

The  conditions  of  production  are  not  materially  differ- 
ent on  the  two  sides  of  the  Atlantic,  except  in  the  wages 
of  labor. 

A  reasonably  fair  estimate  of  the  advantages  and  disad- 
vantages under  which  we  work  will  be  found  in  the  "  Con- 
temporary Review"  for  October,  1878,  by  Mr.  Henderson, 


270  PROTECTION  VS.   FREE  TRADE. 

"America   as   a  Manufacturing  Compstitor."     They  are 
stated  as  follows : 

Advantages. — 1.  More  convenient  access  to  raw  mate- 
rials. 

2.  Important  natural  advantages  in  the  sliape  of  -water- 
power. 

3.  A  better  educated  and  superior  class  of  work-people. 
Disadvantages,  compared  with  England,  in  the — 

1.  Lower  rates  of  interest  upon  capital. 

2.  Lower  cost  of  building  materials. 

3.  Lower  wages. 

4.  Sounder  system  of  finances  and  taxation. 

5.  Lower  rates  of  fuel  and  light. 

G.  More  convenient  and  ready  access  to  the  markets  of 
consumers. 

It  will  be  noted  that  our  "advantages"  are  all  of  a  per- 
manent nature.  Of  the  "  disadvantages,"  "  1  "  is  rapidly 
disappearing  ;  "  2  "  and  "  5  "  are  questions  of  amount  of 
labor  involved  in  which  we  constantly  approach  equality  ; 
"  3  "  is  a  "  disadvantage  "  under  which  we  propose  to  con- 
tinue to  labor  ;  "  4  "  is  doubtful  and  temporary,  at  best ; 
"  6  "  is  not  true  of  our  home  market,  which  embraces  the 
"  consumers  "  we  are  primarily  struggling  to  supply.  It 
resolves  itself,  at  last,  mainly  into  a  question  of  the  cost  of 
labor.  All  the  other  conditions  are  equalized  or  rapidly 
becoming  equalized. 

There  is  a  well-known  and  recognized  law  of  j^olitical 
economy,  as  well  as  of  common  observation — the  law  of 
indifference — that  there  can  not  be  two  prices  for  the  same 
commodity  in  the  same  market.  It  is  thus  expressed  by 
Prof.  Jevons :  "In  the  same  open  market,  at  any  one  mo- 
ment, there  can  not  be  two  prices  for  the  same  kind  of 
article."  "We  are  now  beyond  the  region  of  Reciprocal 
Demand,  where  one  gives  cotton  cloth  for  tobacco — or  oat- 


SCHEDULE  A— PRODUCTION  UXDER  FREEDOM.  271 

meal  for  bananas — wliere  the  trade  depends  merelj  on 
strength  of  desire  and  not  upon  cost  of  production.  We 
are  now  in  the  presence  of  a  fair,  stand-up  bargain,  made 
in  the  same  market,  in  which  cost  of  production  in  money- 
wages  settles  the  advantage  of  the  parties  to  it.  All  other 
conditions  of  production  being  equalized,  one  of  three 
things  must  take  place — one  of  three  possible  adjustments 
must  ensue  : 

1.  Wages  of  laborers  in  the  United  States,  engaged  in 
these  industries  (and  the  same  rate  must  soon  follow  in  all 
others),  must  sink  to  the  level  j)aid  to  workers  in  Europe  on 
the  same  industries. 

2.  Wages  in  Europe  will  be  raised  to  the  level  of  the 
American  rate — which  will  readily  be  conceded  to  be  im- 
possible. We  are  rich,  but  our  riches  are  not  great  enough 
to  "go  around"  on  this  scale. 

3.  Wages  here  and  abroad  will  meet  on  a  common  level 
at  some  intermediate  point. 

In  either  of  the  last  two  events  we  should  have  lowered 
the  wages  of  our  own  workmen  :  we  meet  the  foreign 
laborer  on  a  level  lower  than  ours.  The  result  of  Bastiat's 
exposition  of  human  destiny  was  this  :  "  The  constant  ap- 
proximation of  all  men  toward  a  level  which  is  always 
rising — in  other  terms,  imjprovement  and  equalization  / 
in  a  single  word,  harmony P  I  believe  it.  The  epoch  in 
which  it  will  be  true  is  commonly  laiown  as  the  millennium. 
Then,  and  not  until  then,  will  universal  free  trade  be  a  good 
theory  and  good  practice.  We  shall  approach  it  by  gradual 
steps,  and  not  by  a  catastrophe.  The  United  States  might 
bring  about  a  cataclysmic  ruin  of  itself  by  decreeing  free 
trade  in  the  last  quarter  of  the  nineteenth  century,  but  it 
could  not  bring  on  the  millennium  for  its  own  citizens- 
For  the  present,  its  economic  salvation  dej)ends  on  its  hold- 
ing to  the  high  level  which  Providence  and  Mature  allow 


272  PROTECTIOX    VS.  FREE   TRADE. 

it  to  maintain  in  the  interest  of  ''  all  men  "  who  choose  to 
come  here,  labor,  save,  and  enjoy  hero.  It  will  thus  best 
exercise  its  natural  liberty  and  right  to  pm'sue  and  secure 
the  welfare  of  its  people. 

Prof.  Cairnes,  when  asked  how  we  can  compete  in  the 
same  industry  against  European  labor  (I  will  not  say  "  pau- 
per labor,"  for  the  skilled  industrious  mechanic  in  England 
or  on  the  Continent  is  not  a  pauper),  with  our  higher-priced 
labor,  frankly  says,  in  effect,  we  can  not.  Let  the  Ameri- 
can workman  be  content  with  the  wages  of  the  hedger  and 
ditcher,  and  he  can  compete,  etc.  His  words  are  :  ''  But, 
secondly,  I  beg  the  reader  to  consider  what  is  meant  by 
the  alleged  inability  of  New  England  and  Pennsylvania  to 
compete,  let  us  say,  with  Manchester  and  Sheffield,  in  the 
manufacture  of  calico  and  cutlery.  AVhat  it  means,  and 
what  it  only  can  mean,  is  that  they  are  unable  to  do  so  con- 
sistently with  obtaining  that  rate  of  remuneration  on  their 
industry  which  is  current  in  the  United  States.  If  only 
American  laborers  and  cajpitalists  loould  he  content  with 
the  wages  and  profits  current  in  Great  Britain,  there  is 
nothing  that  I  know  of  to  'prevent  them  holding  their  own 
in  any  markets  to  which  Manchester  and  Sheffield  send 
their  wares ^  ^ 

Mr.  John  Stuart  Mill's  account  of  the  economic  phe- 
nomena which  would  attend  the  experiment  would  be  this : 
"If  American  producers  generally  should  be  unable  to 
compete  with  English  producers  at  the  present  rate  of 
wages,  a  flow  of  gold  (wages  being  regarded  as  measured 
in  gold)  from  America  would  set  in,  by  which,  ultimately, 
a  general  fall  in  the  price  of  labor  and  commodities  would 
be  effected,  until  American  producers  gained  possession  of 
the  market  with  regard  to  the  commodities  in  the  produc- 

*  "  Some  Principles  of  Political  Economy  newly  expounded,"  p.  386. 


SCHEDULE   A— PRODUCTION    UNDER   FREEDOM.  273 

tion  of  wliicli  they  are  at  the  greatest  advantage  or  at  tlie 
least  disadvantage." 

That  is,  the  coin  goes  out  and  gold  becomes  dear. 
Prices,  reckoned  in  gold,  fall,  values  depreciate,  and  goods 
get  so  cheap  that  the  process  of  exportation  is  resumed, 
and,  in  the  end,  things  come  around  to  an  equilibrium. 
Exportation  which  is  brought  about  by  the  necessity  of 
paijlng  debts  incurred  by  excessive  importation  is  uni- 
formly made  at  a  sacrifice.  It  is  ilie  getting  in  debt  by 
overtrading,  and  the  necessity  of  paying  debts,  which 
distresses  nations  as  well  as  individuals  when  pay-day 
comes.  When  the  man  of  business  checks  out  his  bank- 
balances  in  the  course  of  his  business,  he  suffers  no  dis- 
advantage ;  but  when  he  checks  them  out  to  pay  debts 
incurred  in  business — while  it  is  the  best  thing  he  can  do 
with  his  money,  pay  his  debts — yet  his  business  stops.  It 
is  so  with  the  nation.  It  is  better  to  pay  in  bullion  than 
not  to  pay  at  all,  but  there  is  no  option  about  it.  The  coin 
goes  out  and  the  trade  stoics.  We  are  thrown  back  on  the 
domestic  commerce. 

Mr.  Carey  has  weU  expressed  the  law  and  necessary  se- 
quence of  the  events : 

"  All  the  facts  presented  by  the  history  of  the  United 
States  may  be  adduced  in  proof  of  the  assertion  that  a 
country  which  maintains  a  policy  tending  to  ])romote  the 
export  of  raw  materials  must  have  against  it  a  balance  of 
trade  requiring  the  export  of  the  precious  metals,  and  must 
dispense  with  their  services  as  measure  of  valued 

These  facts  may  be  briefly  stated  thus : 

"  Protection  ceased  in  1818,  bequeathing  to  free  trade 
a  commerce  that  gave  an  excess  import  of  specie,  a  jDCople 
among  whom  existed  great  prosperity,  a  large  j)ublic  reve- 
nue, and  a  rapidly  diminishing  public  debt. 

"  Free  trade  ceased  in  1824,  bequeathing  to  protection 


274  PROTECTIOX  VS.   FREE  TRADE. 

a  commerce  that  gave  an  excess  expo7't  of  specie,  an  impov- 
erished people,  a  declining  public  revenue,  and  an  increas- 
ing public  debt. 

"  Protection  ceased  in  1834-'35,  bequeathing  to  free 
trade  a  commerce  that  gave  an  excess  imj>o?'t  of  specie,  a 
people  more  prosperous  than  any  that  had  ever  then  been 
known,  a  revenue  so  great  that  it  had  been  rendered  neces- 
sary to  emancipate  tea,  coffee,  and  many  other  commodities 
from  duty,  and  a  treasury  free  from  all  charge  on  account 
of  public  debt. 

"  Free  trade  ceased  in  1842,  bequeathing  to  protection 
a  commerce  that  gave  an  excess  export  of  specie,  a  people 
ruined  and  their  government  in  a  state  of  repudiation,  a 
public  treasury  bankrupt,  and  begging  everywhere  for 
loans  at  the  highest  rate  of  interest,  a  revenue  collected 
and  disbursed  in  irredeema,ble  paper  money,  and  a  very 
large  foreign  debt. 

"  Protection  ceased  in  1847,  bequeathing  to  free  trade 
a  commerce  that  gave  an  excess  import  of  specie,  a  highly 
prosperous  people.  State  governments  restored  to  credit,  a 
rapidly  growing  commerce,  a  large  public  revenue,  and  a 
declining  foreign  debt. 

"  In  1857,  with  all  the  hundreds  of  millions  of  dollars 
of  gold  supplied  by  California  exported  or  locked  up  by 
want  of  credit,  commerce  was  paralyzed ;  the  price  of 
money  in  commercial  cities  ranged  from  ten  to  thirty  per 
cent,  and  indebtedness  to  foreign  nations  increased  to  such 
an  amount  that  the  payment  of  interest  alone  required  a 
sum  equal  to  all  our  food-export." 

If  the  United  States  should  try  this  experiment,  the 
next  thing  to  be  done  would  be  to  endeavor  to  extricate 
themselves  from  the  predicament  in  which  free  trade  had 
placed  them,  and  restore  the  home  market  to  our  own  pro- 
ducers by  restrictions,  as  they  did  in  1789,  1810,  1842,  and 


SCHEDULE   A— PRODUCTION   UNDER  FREEDOM.  275 

18G1.  There  are  no  indications  in  liistorj,  present  experi- 
ence, or  prophecy,  bv  which  the  United  States  can  secure, 
bj  the  export  of  food  and  raw  materials,  any  greater  con- 
quest of  the  foreign  market  than  she  has  ah'eady  made. 
She  will  master  the  commerce  of  the  world,  so  far  as  it  will 
be  useful  to  her,  by  the  export  of  her  food,  raw  materials, 
and  manufactures,  founded  and  maintained  by  protection. 
And  she  will  maintain  the  protection  of  her  "  infant  indus- 
tries "  until  this  dominion  is  secured,  if  it  takes  a  century. 
"What  is  a  hundred  years  in  the  life  of  a  great  people  ? 

Those  revenue  reformers  who  would  reach  this  triumph 
of  our  commerce  through  manufactures  rather  than  through 
agriculture  and  the  extractive  industries  are  on  the  right 
track.  But  the  way  to  raise  manufactures  to  this  height  of 
achievement  is  not  to  begin  by  razing  them  to  their  foun- 
dations. No  man  who  does  not  assent  to  the  economic 
value  of  protection  as  a  scientific  doctrine  ought  to  be  al- 
lowed to  tinker  with  the  tariff. 

It  is  not  worth  while  to  pursue  the  consequences  which 
would  attend  free  trade ;  no  real  authority  will  dispute 
them.  First,  the  impact  of  the  foreign  competition,  the 
fiUing  of  our  warehouses  with  the  cargoes  of  foreign  fabrics, 
the  abandonment  of  the  struggle  by  the  domestic  producer. 
Then  the  disbandment  of  workmen  out  of  employment,  or 
"  squeezing,"  as  Mill  says,  "  by  their  competition,  their  food 
and  necessaries  from  the  shares  of  other  laborers,"  the  de- 
struction of  the  capital  invested  in  buildings  and  machinery, 
crumbling  to  ruin  under  idleness  and  rust ;  the  absolute 
dissipation  of  the  existing  industrial  organization.  Then 
tlie  loss  of  our  gold  and  silver,  which  loosens,  cripples,  and 
destroys  our  whole  existing  association ;  the  people  to  be 
left,  at  the  last,  in  a  condition  of  hopeless  indebtedness,  con- 
stantly increasing  to  foreign  nations,  and  consequent  con- 
dition of  permanent  bankruptcy.     When  the  situation  be- 


276  PROTECTION  VS.   FREE  TRADE. 

came  intolerable,  we  sliould  be  poor  enougli  to  enter  upon 
the  unprofitable  industries,  and  the  time  would  have  arrived 
when,  according  to  Prof.  Sumner,  we  could  use  the  coal 
and  coke  and  iron-ore  which  we  had  been  saving  for  future 
generations,  and  when  we  could  find  a  use  for  those  "  509 
steam-engines,"  for  we  should  have  come  to  that  ideal 
"  something  else  "  to  do.  We  have  reached  the  promised 
land,  and  the  "  something  else  "  is  done  under  European 
conditions  of  wages,  under  the  European  standard  of  living, 
comfort,  and  enjoyment. 

This  is  exactly  what  will  happen  under  the  attempt  to 
procure  $2,200,000,000  in  the  necessaries,  conveniences, 
and  luxuries  of  life  "  under  freedom."  The  wickedness 
of  the  proposal  is  more  manifest  in  that  the  professors,  at 
least,  know  that  these  results  must  flow  from  the  action  of 
economic  forces  which  are  acknowledged  elements  in  the 
science  which  they  teach. 

We  dismiss  it  as  the  "  paradise  of  fools." 


CHAPTER  XII. 

COST   OF   PRODUCTION — A    PARADOX. 

A  VERY  formidable  attempt  has  been  made  bj  English 
and  American  free-traders  to  solve  this  question  on  a  con- 
sideration of  "  cost  of  production." 

Prof.  Perry,  in  agreement  with  them,  attempts  to  offset 
the  cost  of  labor  in  the  United  States  by  depreciating  the 
proportion  of  labor  to  the  other  elements  of  the  cost  of 
production.  With  him  "  cost  of  production  "  is  made  up 
of  "  wages  "  and  "  profits."  In  the  proportion  in  which  he 
could  eliminate  the  labor  which  enters  into  a  product,  he 
would  be  enabled  to  claim  that  some  other  reasons  than  a 
high  rate  of  w^ages  should  be  assigned  to  account  for  our 
inability  to  compete  with  the  foreign  manufacturer.  This 
seems  to  give  him  a  motive  for  unworthily  disparaging  the 
contribution  which  "labor"  makes  to  our  aggregate  indus- 
trial results.  It  is  paid  with  higher  wages  by  the  day,  but 
it  is  more  efficient — the  American  laborer  works  more 
hours  per  day,  and  loses  a  less  number  of  Mondays,  because 
he  drinks  less  beer  on  Sundays — and,  at  last,  gives  only 
twenty  per  cent  increased  value  to  the  materials  his  labor 
enters  into. 

So,  to  avoid  the  argument  that  we  can  not  compete 
with  the  foreign  manufacturer,  because  wages  are  high  in 
this  country,  it  is  necessary  to  neutralize  their  effect  in 
some  way,  either  by  reducing  the  proportion  which  labor 
beai-s  to  the  whole  cost  of  the  product— saying  that  our 


278  PROTECTION    VS.   FREE   TRADE. 

labor  is  more  efficient — or  tliat  other  elements  of  "  cost  of 
production"  are  liiglier,  such  as  taxation,  raw  materials, 
etc.  But  after  excluding  all  these  items  of  cost,  there  still 
remained  the  "  high  rate  of  wages  "  to  contend  witli.  Mr. 
David  A.  Wells,  in  liis  report  for  1868  (as  Commissioner 
of  Kevenue),  set  off  against  our  rate  of  wages  the  higher 
efficiency  of  our  laborers.  He  argued  that  wages  were 
higher,  but  that  our  laborers  earned  more.  "While  the 
American  workman  was  earning  a  higher  pay  ^^er  diem,  he 
put  by  so  much  a  higher  effort  into  his  work ;  and  so  it 
resulted  that,  effort  for  effort,  the  American  got  no  more 
remuneration  than  the  European.  In  that  way  he  sup- 
posed he  had  answered  the  protectionist's  argument  that 
we  could  not  compete  because  of  high  wages.  His  propo- 
sition was  that  the  same  amount  of  money  purchased  no 
more  Iaho}\  in  the  sense  of  effort,  efficiency,  here  than  it 
did  abroad;  and  that  the  English  operative  received  as 
high  a  compensation  for  what  he  actually  did  as  the  Ameri- 
can operative.  It  was  Mr.  Brassey's  argument  over  again, 
probably  in  his  lifetime  the  greatest  employer  of  labor  in 
the  w^orld.  The  moral  he  endeavored  constantly  to  en- 
force was  the  heavy  detriment  which  Great  Britain  suf- 
fered from  her  dear  labor — a  detriment  so  heavy,  an  eco- 
nomical drawback  so  serious,  that  only  her  great  resources 
in  other  respects  enabled  her  to  bear  up  under  it  against 
the  stream  of  Continental  competition.^ 

'  And  right  here  let  us  ask  why  Great  Britain,  whose  "  advantageous  in- 
dustries "  are  mining  coal  and  iron-ore,  does  not  exclusively  pursue  them, 
and  turn  them  over  to  the  cheaper  labor  of  the  Continent,  to  be  wrought  up 
into  the  commodities  she  needs  by  the  cheaper  labor  there.  Englishmen 
have  "  historical  antecedents,"  and  it  is  not  in  their  nature,  morally,  indus- 
trially, or  historically,  to  "  fall  in  "  in  the  march  of  the  family  and  stand  at 
the  point  of  their  most  "  advantageous  industries  " — coal  and  iron.  Coal  and 
iron  would  not  employ  all  their  labor  and  capital.  English  statesmen  right- 
fully think  it  their  duty  to  provide  for  the  welfare  of  Englishmen  who  are  on 


COST   OF  PKODUCTION— A  PARADOX  279 

So  Mr.  Brassej  was  gotten  rid  of  by  calling  him  a 
"  commercial  writer "  instead  of  an  "  economist."  What 
he  said  was  this :  "  It  is  the  opinion  of  Mr.  Lothian  Bell, 
one  of  our  highest  authorities,  tliat  after  all  the  efforts  of 
our  iron-masters  to  contend  with  the  difficulties  of  hio-h- 
paid  labor  by  the  improvement  of  machinery,  labor  costs 
fifteen  per  cent  more  in  England  than  on  the  Continent." 
(Prof.  Periy  figures  out  the  disadvantages  of  America  as 
against  England,  by  reason  of  higher  wages,  at  onlj/our  per 
cent.)  "And  this  disadvantage,  in  his  opinion,  entirely 
neutralizes  the  advantages  we  derive  from  our  great  facili- 
ties in  the  proximity  of  our  iron-mines  to  our  coal-beds. 
Our  workmen  are  not  sufficiently  alive  to  the  necessity  for 
the  exercise  of  the  utmost  efforts  of  ingenuity  in  order* to 
enable  capital  invested  in  England  to  hold  its  own  in  the 
industrial  campaign." 

This  position  could  not  be  logically  assumed  by  the 
scientific  free-traders.  "What,"  they  said,  "is  now  the 
grand  argument  with  the  people  of  the  United  States  for 
the  maintenance  of  protection  ? "  "  Why,  the  high  cost  of 
jprodudion  in  that  country."  "  And  what  is  the  evidence 
of  this  high  cost  of  production  % "  "  Simply,  the  high  rate 
of  wages  which  prevails."  "How,"  they  ask,  "can  we, 
with  our  high-priced  labor,  compete  with  the  pauper  labor 
of  Europe  ? " 

"  I  must  frankly  own,"  says  Prof.  Cairnes,  "  accepting 
the  point  of  view  of  the  current  theory  of  cost,  I  can  find 
no  satisfactory  reply  to  this  question,  and  I  am  quite  sure 
that  Mr.  Wells,  who  implicitly  adopts  this  point  of  \new " 
(in  one  of  his  Cobden  Club  essays),  "Aas  wholly  failed  to 
furnish  one.  .  .  .  What  he  shows  is,  that  labor  in  Eng- 
land, though  much  higher-priced  than  in  most  European 

English  soil.     An  Englishman  has  resources  enough  to  go  to  the  front,  and 
to  the  front  he  goes. 


280  PROTECTIOX  VS.   FREE  TRADE. 

countries,  and  in  particular  than  in  Eussia,  is  still  so  much 
more  efficient  here  than  there,  that  the  high  English  rates 
are  practically  cheaper  for  the  English  capitalist  than  the 
lower  Continental  rates  for  the  capitalists  of  the  Continent. 
What  is  the  bearing  of  this  upon  the  American  demand 
for  protection  against  England  9  A\^ill  Mr.  Wells  main- 
tain that,  as  the  efficiency  of  English  labor  is  to  that  of 
Russian,  so  is  the  efficiency  of  American  labor  to  that  of 
English  ?  If  not,  how  does  his  objection  to  the  protection- 
ist's criterion  of  cost,  founded  on  the  different  degrees  of 
industrial  efficiency,  aiieet  the  argument  ?  And  as  little  does 
he  seem  to  me  to  make  good  the  pertinency  of  his  objection 
to  the  other  ground  taken."  (The  other  ground  taken 
was  "  the  varying  purchasing  power  of  money  in  relation 
to  the  laborers'  requirements."  Mr.  Wells,  like  all  others 
who  labor  to  minimize  the  difference  in  wages  in  the 
United  States  and  England,  takes  the  ground  that  the 
workman  in  the  latter  can  purchase  as  much  by  the  wages 
of  a  day's  labor  as  in  the  former.)  He  continues  :  "  It  is 
possible  that  in  a  few  manufacturing  districts  in  the  United 
States  the  rent  of  an  artisan's  dwelling  is  higher  than  in 
some  manufacturing  districts  in  England,  but  in  the  most 
important  articles  of  the  laborer's  consumption — in  the 
whole  list  of  "provisions,"  for  example — the  advantage  in 
respect  to  price  is  unquestionably  with  the  American  con- 
sumer." (See  Carroll  D.  Wright's  "  Generalizations," 
Chapter  XVIII,  infra,  page        .) 

The  free-trader,  then,  is  headed  off  as  he  attempts  to 
proceed  according  to  "the  current  theory  of  cost."  We 
retrace  our  steps,  and  try  a  new  route.  We  must  start  with 
a  different  conception  of  the  "  cost  of  production." 

The  words  "  cost  of  production  "  are  not,  they  say,  now 
to  be  interpreted  from  the  capitalist's  point  of  view.  They 
do  not  represent  the  expenses  which  the  manufacturer  has 


COST  OF  PRODUCTIOX— A  PARADOX.        281 

been  put  to  in  order  to  produce  tlie  finished  commodity. 
Thej  do  not  stand  for  the  outlay  in  wages  and  interest — the 
money  which  the  capitahst  has  advanced  to  pay  "  wages," 
and  tliat  whicli  he  will  retain  as  "  profits."  These  words 
are  to  be  understood  as  representing  the  "  actual  difficulties 
of  production  as  measured  by  the  sacrifices  which  produc- 
tion requires ;  not  the  amount  of  wages  and  profits,  whether 
measured  in  money  or  produce,  comprised  in  the  capital- 
ist's outlay  and  return."  They  stand  for  the  actual  labor 
and  abstinence.  The  sacrifice  which  is  taken  into  the  ac- 
count is  laboi\  not  t\\Qjprice  of  labor,  the  j^hysical  or  men- 
tal effort,  expended  to  produce  the  given  commodity.  This 
is  reckoned  as  the  cost^  and  it  is  estimated  in  so  many  days' 
labor  of  so  many  men.  In  this  point  of  view,  a  ton  of 
iron  costs  no  more  in  America  than  in  England ;  and  in 
this  point  of  view  wages  and  profits  are  not  elements  of 
cost.  "  Indeed,"  says  Prof.  Cairnes,  "  it  may  be  doubted  if 
the  theory  of  comparative  cost  of  production  as  the  ruling 
principle  of  international  trade  could  ever  have  been  worked 
out  from  the  point  of  view  which  regards  cost  as  consisting 
in  wages  and  profits ;  and,  however  this  may  be,  it  is  at 
least  quite  certain  that  the  theory  of  international  values, 
adopted  alike  by  Mill  and  Ricardo,  is  absolutely  irreconcil- 
able with  that  view." 

Prof.  Cairnes  then  administers  the  conjp  de  grace  to  Mr. 
David  A.  Wells,  and  the  protectionists  as  well,  who  think 
that  our  high  rate  of  wages  handicaps  us  in  the  industrial 
race :  "  The  rate  of  wages,  whether  measured  in  money  or 
in  the  real  remuneration  of  the  laborer,  affords  an  approxi- 
mate criterion  of  the  cost  of  production,  either  of  money 
or  of  the  commodities  that  enter  into  the  laborer's  real 
remuneration,  hut  in  a  sense  the  inverse  of  that  in  which  it 
is  understood  in  the  argument  under  consideration.  In 
other  words,  a  high  rate  of  wages  indicates  not  a  high  but 


282  PROTECTIOX    vs.  FP.EE   TRADE. 

a  low  cost  of  production  for  all  commodities  measured  in 
which  the  rate  of  wages  is  high,  as,  on  the  other  hand,  a 
low  rate  of  wages  indicates  a  high  cost  for  all  measured  in 
which  the  rate  is  low.  Thus,  in  the  United  States  the  rate 
of  wages  is  high,  whether  measured  in  gold  or  in  the  most 
important  articles  of  the  laborei-'s  consumption,  a  fact 
which  proves  that  the  cost  of  producing  gold,  as  well  as 
that  of  producing  those  other  commodities,  is  low  in  the 
United  States.  On  the  other  hand,  the  rate  of  wages  in 
Europe,  measured  by  the  same  standards,  is,  at  least,  as 
compared  with  the  rates  in  the  United  States,  low,  which 
again  merely  proves  that  the  cost  of  producing  the  com- 
modities constituting  those  standards  is  high  in  Europe  as 
compared  with  their  cost  in  the  United  States.  This  ele- 
mentai-y  trath  is  so  far  from  being  generally  ajjpreciated, 
that  I  should  not  be  surprised  if  its  simple  statement  should 
appear  to  some  persons,  and  possibly  even  to  some  econo- 
mists, as  paradoxical^^ 

Mr.  Wells  had  been  set  down  with  considerable  vigor, 
because  he,  in  common  with  protectionists,  had  indicated, 
as  the  disadvantage  under  which  American  industry  la- 
bored, the  high  money-price  of  labor.  His  criterion  was 
the  "  cost  of  production,"  as  measured  by  the  high  rate  of 
wages  paid  in  the  manufacture  of  the  articles  claiming  pro- 
tection. Mr.  Wells  had  innocently  supposed  that  a  high 
rate  of  wages  meant,  in  the  protected  industries — competing 
industries — a  high  cost  of  labor ;  and  that  the  "  cost  of  pro- 
duction "  would  be  greater  or  less,  according  to  the  cost  of 
the  labor  which  entered  into  the  production.  The  ele- 
mentary truth,  which  Prof.  Cairnes  thought  would  appear 
to  be  "  paradoxical "  to  some  persons,  and  possibly  even  to 
some  economists,  was  this :  that  in  tlie  United  States  a 
"  high  rate  of  wages "  proved  that  the  "  cost  of  produc- 
tion" was  low.     Of  course  there  was  a  dialectic  artifice  in 


COST  OF  PRODUCTIOX— A  PARADOX.  283 

this.  It  vrsis  a  case  of  juggling  with  tlie  words  "  cost  of 
production,"  sometimes  meaning  the  money-pj^ioe  of  labor  ; 
sometimes  meaning  the  sacrifice^  the  physical  efforts  ex- 
pended to  produce  the  given  commodity.  To  the  same 
eifect  Prof.  Sumner,  in  his  tariff  commission  address :  "  If 
it  is  alleged,  as  it  constantly  is  in  this  controversy,  in  a 
sweeping  way,  that  American  industries  need  protection^ 
because  American  wages  are  higher  than  foreign  wages,  it 
is  a  case  of  joining  a  very  wide  inference  to  very  inade- 
quate premises.  What  are  the  comparative  conditions  of 
industry  in  America  and  elsewhere,  as  regards  convenience 
and  cost  of  raw  materials,  quality  and  cost  of  machinery, 
rent  of  land  used,  character  of  the  climate  as  affecting  the 
requirements  of  various  industries,  national  character  as 
respects  industry,  diligence,  sobriety,  intelligence,  etc.,  of 
laborers,  distance  from  the  market,  or  convenience  and  cost 
of  transportation,  convenience  and  cost  of  natural  agents 
(coal  or  water),  taxes  and  tax  system,  the  security  afforded 
by  the  excellence  or  otherwise  of  the  government,  etc.  ? 
Surely  it  is  plain  that  these  things  are  the  conditions  of 
production,  and  the  comparative  rates  of  wages,  taken  apart 
from  the  purchasing  power  of  money  or  the  efficiency  of 
labor,  to  say  nothing  of  all  the  other  conditions  enumer- 
ated, are  by  no  means  a  criterion  for  a  decision  whether  an 
industry  can  be  caiTied  on  successfully  or  not.  The  lists 
of  comparative  wages  which  have  been  made  and  which 
are  rehed  upon  by  protectionists,  and  are  often  accepted 
by  free-traders  as  pertinent  to  the  issue,  and  perhaps  as  de- 
cisive of  it,  have  no  value  at  all  for  the  purpose}    The  em- 

'  Prof.  Perry  ("Political  Economy,"  edition  1873,  chapter  on  "Foreign 
Trade  "),  contending  that  high  wages  or  low  wages,  high  interest  or  low  in- 
terest, have  little  or  nothing  to  do  with  the  profitable  exchange  of  commodi- 
ties, does  say : 

"  To  this  law  of  foreign  trade  there  is,  however,  a  single  not  unimportant 


284:  PROTECTION    VS.  FREE   TRADE. 

ployer  alleges  tliat  lie  can  make  no  profits  because  lie  pays 
high  wages.  lie  assumes,  apparently,  that  wages  and  prof- 
its displace  each  other.  It  is  certain  that  they  do  nothing 
of  tlie  kind."     l^ow,  the  protectionist  assumes  nothing  of 

exception.  When  two  nations  go  into  the  market  of  the  world  with  the  same 
commodity,  to  buy  gold  and  silver,  then  the  absolute  money-cost  oi'  that  com- 
modity is,  as  between  the  two,  an  important  question.  That  one  of  the  two 
nations,  whose  wages  are  lower  and  whose  rate  of  interest  is  less,  in  the  man- 
ufacture of  the  common  commodity,  will,  in  a  trade  for  gold,  undersell  the 
other.  .  ,  .  This  is  clear,  and  it  is  the  only  case  where  foreign  trade  is  deter- 
mined by  the  absolute  co^t  of  production.  But  our  objector  gets  no  crumb  of 
comfort  here ;  for,  in  the  iirst  place,  the  commerce  of  the  world  is  not  a  com- 
merce for  gold  and  silver,  but  a  commerce  of  commodities,  in  the  exchange 
of  which  relative  cost  is  the  only  principle.  And,  in  the  second  place,  when 
two  nations  go  into  the  market  of  the  world  for  gold,  they  rarely  carry  the 
same  commodity.  .  .  .  And,  in  the  third  place,  if  two  nations  do  carry  the 
same  commodity  into  the  same  market,  to  buy  the  same  gold,  and  the  nation 
whose  wages  and  profits  are  higher  is  thereby  at  a  disadvantage  in  the  trade, 
how  is  a  restrictive  tariff  at  home  to  help  that  matter?  The  true  remedy  is 
to  cultivate  our  own  peculiar  advantages  to  the  highest  point,  and  carry  those 
commodities  abroad  to  buy  our  gold,  and  not  endeavor  to  compete  with  our 
neighbor  in  the  same  commodity." 

This  attempt  of  Prof.  Perry  to  smother  the  truth  in  mere  verbiage  is  posi- 
tively misleading.  Let  us  take  a  short  cut  through  all  this  circumlocution. 
The  United  States  is  a  gold-producing  country.  When  any  foreign  manu- 
facturer offers  in  this  market  the  same  goods  offered  by  the  American  manu- 
facturer, they  are  both  equally  engaged  in  "  a  trade  for  gold."  The  for- 
eigner, then,  by  reason  of  lower  wages  and  less  interest,  undtrsclls  the  domes- 
tic manufacturer.  What  is  the  logical  remedy  proposed  by  the  Professor  ? 
Abandon  the  competing  industry  in  which  we  are  beaten.  We  have  seen 
often  enough  why  we  must  summon  the  restrictive  tariff  if  we  are  to  have 
our  wants  supplied.  The  protected  industries  are  these  same  competing  in-  ■ 
dustries. 

The  great  trades  of  the  world  are  carried  on  between  countries  widely 
removed  from  each  other  in  the  scale  of  civilization  and  in  respect  to  their 
natural  resources  and  productions.  Between  such  countries  "  cost  of  pro- 
duction "  is  of  no  account.  Their  industries  are  non-competing.  It  is  a  case 
of  reciprocal  demand.  We  do  not  know  and  do  not  care  what  it  costs  to  pro- 
duce tea,  coffee,  Apollinaris  water,  Smyrna  figs,  and  the  like.  If  we  want 
them  "  bad  enough,"  and  can  pay  for  them,  we  bui/  them,  otherwise  go  with- 


COST  OF  PRODUCTION— A  PARADOX.        285 

tlie  kind.  It  is  not  they  who  say  with  the  professors,  that 
"wages  and  profits  are  the  leavings  of  each  other."  Prof. 
Sumner  then  goes  on  to  allege,  what  no  one,  no  protection- 
ist at  least,  is  interested  to  deny,  that  "  profits  and  wages 
may  both  be  high  or  both  low  at  the  same  time,  or  one  may 
be  high  and  the  other  low.  The  fact  is,  that  instead  of  one 
being  displaced  by  the  other,  they  most  always  go  together, 
both  high  or  both  low  at  the  same  time." 

AVithout  stopping  now  to  \'indicate  the  American  man- 
nfactnrer,  as  having  the  common  sense  to  equalize  the  other 
conditions  enumerated,  wc  are  simply  to  inquire  whether, 
inasmuch  as  the  wages  of  labor  are  higher  in  America  than 
in  Europe,  that  fact  j9;'(?  tanto  increases  the  cost  of  pro- 
duction to  the  American  manufacturer.  The  point  is  dis- 
tinctly raised  by  Prof.  Sumner :  "  Let  us  look  now  at  the 
other  dogma,  high  wages  make  protective  taxes  necessary. 
It  is  the  very  opposite  of  the  truth.  If  wages  are  high, 
that  is  the  reason  why  no  protection  taxes  are  needed,  even 
if  they  might  be  in  some  other  case.  In  Germany,  the 
protectionists  generally  allege  that  lower  wages  in  Ger- 
many than  in  England  are  a  proof  that  Germany  is  indus- 
trially inferior,  and  needs  protection  against  England.  The 
protectionist's  argument  never  flags  on  account  of  any  httle 
variation  in  the  facts." 

Prof.  Cairncs  takes  a  further  step  :  "  It  is  strange  that 
those  who  employ  this  alignment"  (that  the  cost  of  pro- 
ducing commodities  is  higher  in  America  than  in  Europe, 
because  the  rates  of  wages  measured  in  money  are  higher 
here  than  there)  "should  not  perceive  that  it  proves  too 

out  them.  In  the  competing  industries  it  is  a  question  of  cost  of  production. 
We  can't  buy  all,  and  therefore  must  make  some.  I  commend  the  reader  to 
the  clear  and  intelligent  discussion  or  this  distinction  between  international 
trade  based  on  cost  of  production  and  reciprocal  demand,  in  "  Some  Leading 
Principles  of  Political  Economy,  Newly  Expounded,"  by  Prof.  Cairnes,  Part 
III,  chap,  iii   (Harper's  edition). 


286  PROTECTION  VS.   FEEE  TRADE. 

mucli.  The  liigli  rates  of  wages  in  tlie  United  States  are 
not  peculiar  to  any  branch  of  industry,  but  are  universal 
throughout  its  whole  range.  If,  therefore,  a  high  rate  of 
wages  proves  a  high  cost  of  production,  and  a  high  cost  of 
production  proves  a  need  for  protection,  it  follows  that  the 
farmers  of  Illinois  and  the  cotton-planters  of  the  Southern 
States  stand  in  as  much  need  of  fostering  legislation  as  the 
cotton-spinners  of  Xew  England  or  the  iron-masters  of 
Pennsylvania.  ...  If  American  protectionists  are  not  pre- 
pared to  demand  protective  duties  in  favor  of  the  Ilhnois 
farmer  against  the  competition  of  his  English  rival,  they 
are  bound  to  admit  either  that  a  high  cost  of  jproduction  is 
not  incompatible  with  effective  competition,  or  else  that  a  high 
rate  of  wages  does  not  jprove  a  high  cost  of  jproduction :  and 
if  this  is  not  so  in  Illinois,  then  I  wish  to  know  why  the 
case  should  be  different  in  Pennsylvania  or  New  England. 
If  a  hio^h  rate  of  wages  in  the  first  of  these  States  be  con- 
sistent  with  a  low  cost  of  producing  com,  why  may  not  a 
high  rate  of  wages  in  Pennsylvania  be  consistent  with  a 
low  cost  of  producing  coal  and  iron  ? — or  a  high  rate  of 
wages  in  New  England  be  consistent  with  a  low  cost  of 
producing  calico  ? " 

Now  we  have  had  a  long  chase  after  this  subtle  paradox, 
but  we  are  in  a  situation  to  take  it  firmly  in  our  grasp,  as 
also  to  see  just  what  it  is  fitted  to  prove.  An  Illinois  farm- 
er, on  his  fertile  prairie-land,  gathers  a  large  croj)  of  corn, 
say,  with  a  comparatively  small  amount  of  labor — that  is,  at 
a  small  physical  effort.  Measured  in  corn,  which  is  his 
wages, he  gets  a  high  rateoi  wages;  the  cost  of  pi^oduction, 
measured  in  sacrifice — muscular  effort — is  low.  But  it  is 
low  only  by  comparison  with  the  amount  of  com  which  a 
hke  effort  would  produce,  say,  in  England.  There  is  no 
natural  absolute  standard  uniformly  regulating  the  propor- 
tion between  corn  and  effort ;  that  depends  on  the  fertility 


COST  OF  PRODUCTION— A  PARADOX.        287 

of  different  soils — the  advantages  of  one  instrument  of  pro- 
duction over  another.  In  England,  the  farmer  expends  the 
same  effort  and  gets  less  corn.  The  "  cost  of  production," 
measured  in  sacrilice,  in  eifort,  is  high.  Measured  in  corn, 
which  is  his  wages,  he  gets  a  low  rate  of  wages.  What, 
exactly,  does  this  difference  represent  ?  Not,  at  all,  the  dif- 
ference of  labor.  In  the  case  of  the  Illmois  farmer,  it  rep- 
resents the  increased  quantity  of  corn — wages  measured  in 
corn — which  the  land,  the  natural  instiniment  of  produc- 
tion, had  added  to  his  labor.  His  product  is  now  what 
labor  plus  "  the  gratuitous  forces  of  nature  "  creates,  or,  if 
you  dislike  that  phrase,  a  natui-al  instrument  of  high  pro- 
ductive power.  The  lUinois  farmer  has,  with  the  consent 
of  the  Government  under  which  he  lives,  been  allowed,  for 
reasons  touching  the  general  welfare,  to  appropriate  a  nat- 
ural instrument  of  production.  His  labor  alone  would,  for 
example,  produce  fifteen  bushels  of  wheat,  as  would  the  la- 
bor of  an  English  farmer.  The  fertile  soil  adds  ten  bush- 
els as  a  gratuity — to  somebody.  The  Enghsh  farmer  is 
using  a  less  productive  natural  instrument,  its  cost  has 
been  increased  by  the  necessary  repairs,  fertilizing,  under- 
draining,  etc.,  which  have  been  going  on  for  centuries. 
Labor  for  labor,  the  American  labor  is  no  more  productive 
than  English  labor.  The  superior  product  comes  from  a 
better  instrument  of  production,  placed  in  the  hands  of  the 
American  laborer  by  the  consent  of  the  society  in  which  he 
lives.  Even  though  the  owner  paid  full  value  for  it,  its 
use  costs  the  nation  at  large  nothing. 

"  If,"  then  asks  the  Professor,  "  a  high  rate  of  wages 
in  the  first  of  these  States  be  consistent  with  a  low  cost  of 
producing  corn^  why  may  not  a  high  rate  of  wages  in 
Pennsylvania  be  consistent  with  a  low  cost  of  producing 
iron  f  "  As  before,  there  is  no  natural  absolute  standard 
unifoiTuly  regulating  the  proportion  between  effort  and 


288  PROTECTION    T'^.   FREE   TRADE. 

iron.  The  rate  of  wages,  measured  in  iron,  may  be  as  liigli 
as  when  measm'ed  in  corn — it  certainly  would  be  if  there 
were  no  other  nations,  comparison  in  which  disturbed  rela- 
tive standards.  It  is  money-prices  which  confuse  us.  In 
the  limits  of  the  same  country,  effort  for  effort,  the  farmer 
and  furnace-man  would  reap  proportional  rewards,  under 
the  laws  of  competition.  In  the  limits  of  two  countries, 
say  England  and  the  United  States,  with  similar  conditions 
of  production — the  same  chemical  equivalents  in  ores,  coal, 
lime,  steam,  and  the  same  general  physical  power  in  their 
workmen — effort  for  effort,  thew  for  thew,  sinew  for  sinew 
— the  Englishman  and  the  American  would  produce,  for 
a  given  exertion,  equal  quantities  of  iron.  The  "  cost  of 
production,"  estimated  in  sacrifice,  physical  labor,  would 
be  the  same  in  the  two  countries.  The  two  quantities  of 
iron  would  represent  equal  effort ;  for  in  the  example,  the 
forces  of  nature  had  contributed  equal  gratuities  to  the  re- 
spective workmen — they  are  using  equally  efiicient  natural 
instruments  of  production. 

AVhy,  then,  in  America,  should  not  equal  efforts  em- 
bodied in  Illinois  wheat  and  in  Pennsylvania  iron  ex- 
change for  each  other  ?  They  should.  It  is  the  aim  of 
protection  to  cause  them  to  exchange  one  for  the  other, 
not  by  tlie  force  of  the  statute,  but  by  the  decree  of  Na- 
ture ;  to  equalize  the  natural  facilities  of  production,  to 
pool  the  resources  of  the  land,  and  to  enable  each  Ameri- 
can to  receive  his  pay  for  his  onerous  contribution  to  the 
gross  annual  product. 

Why  does  not  the  Pennsylvania  iron-master's  product 
exchange,  ton  for  ton,  for  that  made  in  England,  or,  in 
other  words,  bear  the  same  value  in  a  neutral  market  ? 
Because  the  iron-worker  in  England  is  compelled  to  sell 
the  sacrifice,  the  physical  effort,  embodied  in  his  product 
at  a  lower  rate  in  money  than  his  American  brother.     There 


COST   OF  PRODUCTION— A  PARADOX.  289 

is  no  difference  in  "  cost  of  production "  in  these  cases, 
measured  in  sacrifice;  measured  in  "wages,"  there  is  a 
vast  difference.  The  American  workman  is  fatally  under- 
sold, and  so  we  are  around  to  our  starting-point.  Our  new 
criterion  of  cost  of  production  has  not  availed  us.  What 
we  have  discovered  is,  that  when  capital  and  labor  in 
America  have  possession  of  superior  instruments  of  pro- 
duction, there  are  high  returns  for  labor,  considered  as 
effort,  and  high  wages  in  some  industries,  reckoned  in  the 
products  of  the  industries.  What  the  market  value  of 
these  products  is  or  will  be,  we  are  fm-nished  with  no 
data  for  determination. 

Logically,  we  have  reached  the  end  of  our  abstract 
reasoning ;  but  the  mere  speculation  has  given  us  no  sense 
of  security  for  practical  action.  The  whole  question  is  re- 
solved at  last  into  one  ai  fact,  not  of  science.  I  state  it  in 
the  words  of  Prof.  Cairnes,  whom  we  have  so  pleasantly 
followed  around  this  Robin  Hood's  bam :  "  I  must,  there- 
fore, contend  that  the  high  scale  of  industrial  remuneration 
in  America,  instead  of  being  evidence  of  a  high  cost  of 
production  in  that  country,  is  distinctly  evidence  of  a  low 
cost  of  production — of  a  low  cost  of  production,  that  is  to 
say,  in  the  first  place,  of  gold''''  (this  being  a  gold-producing 
country),  "  and,  in  the  next,  of  the  commodities  which 
mainly  constitute  the  real  wages  of  labor — a  description 
which  embraces  at  once  the  most  important  of  raw  mate- 
rials of  industry  and  the  most  important  articles  of  gen- 
eral consumption.''^ 

That  is,  the  group  of  industries  which  his  economy 
prescribes  that  we  should  pursue  are  the  ones  in  which 
land,  as  a  natural  instrument  of  production,  adds  that 
increment  to  the  product  which  marks  the  distinction  be- 
tween a  low  "cost  of  production"  and  a  high  "cost  of 
production,"  in  the  Professor's  sense  of  the  words. 

14 


290  PROTECTION  VS.   FREE  TRADE. 

"  As  regards  commodities  not  included  iu  this  descrip- 
tion, the  criterion  stands  in  no  constant  relation  of  any 
kind  to  their  cost,  and  is,  therefore,  simply  irrelevant  to 
the  point  at  issue." 

On  the  contrary — for  here  the  Professor  is  guilty  of  a 
singular  slip — "the  commodities  not  included  in  this  de- 
scription "  are  the  very  ones  to  the  production  of  which 
l^roiection  does  apply,  and  for  the  reason  that  the  criterion 
of  wages  does  stand  in  such  a  constant  relation  to  their 
cost  as  to  keep  our  products  out  of  our  own  or  a  neutral 
market.  Unquestionaljly  there  is  a  vast  expanse  of  neutral 
territory,  in  which  we  efficiently  supply  our  own  wants. 
Lumber,  stone,  building  materials,  household  goods,  car- 
riages, sewing-machines,  guns,  clocks,  and  professorships 
in  colleges,  are  examples  of  commodities  in  which  we  ask 
no  odds  of  outsiders.  Of  the  ten  thousand  millions  of  our 
annual  consumption,  these  industries  supply  six  thousand 
seven  hundred  millions  of  commodities  in  which  no  people 
can  successfully  compete  with  us,  and  we  need  no  jprotec- 
tion.  For  the  three  hundred  and  fifty  millions  of  foreign 
fruits,  raw  materials,  and  so  on,  we  can  not  compete,  and 
protection  is  useless.  For  the  three  remaining  thousand 
millions  we  consume,  we  are  in  coinpet'dion  in  production. 
And  it  is  in  all  these  most  important  articles  \\i^i protection 
does  protect. 

"  And  now  we  may  see  what  this  claim  for  protection 
to  American  industry,  founded  on  the  high  scale  of  Ameri- 
can remuneration,  really  comes  to :  it  is  a  demand  for 
special  legislation,  and,  in  consideration  of  the  possession 
of  special  industrial  facilities — a  complaint  against  the 
exceptional  hounty  of  nature P 

But  the  exceptional  lounty  of  nature  does  not  furnish 
us  the  exportahles  with  which  we  can  buy  the  satisfaction 
of  our  desires.     How  next  shall  we  proceed  % 


COST   OF  PRODUCTION— A  PARADOX.  £91 

Bastiat  has  liimself  furnished  a  perfect  answer,  even 
tliougb.  lie  did  not  intend  it : 

"  A  man  who  has  in  his  hands  the  tools  necessary  for 
labor,  the  materials  to  work  ujyon,  and  the  jprovisions  for 
his  subsistence  during  the  ojperation,  is  in  a  situation  to 
determine  his  own  remuneration^ 

The  whole  ease  lies  in  that  nutshell.  The  nation  has 
the  tools  of  every  possible  kind  known  to  nature's  bounty 
or  to  human  invention ;  perfect  stores  of  force,  skill,  indus- 
try, effective  desires  of  accumulation ;  every  known  motor 
ever  suggested  by  an  a  jpriori  economist ;  and  "  the  provi- 
sions for  subsistence  "  during  the  operation.  The  operation 
in  our  case  has  consisted  in  the  building  up  of  the  most 
complete  industrial  organization  in  the  world.  We  have, 
by  the  confession  of  the  free-trader,  "  accumulated  capital 
far  more  rapidly  than  any  other  people  in  the  world."  Our 
own  production  has  determined  our  own  remuneration.  Our 
annual  production  in  manufactures  is  greater  than  that  of 
England ;  and  the  inventory  of  the  wealth  of  the  United 
States  is  to-day  greater  by  ten  thousand  millions  of  dollars 
than  that  of  Great  Britain,  built  uj)  by  centuries  of  war, 
diplomacy,  colonial  conquest,  protection,  and  free  trade. 
How  could  a  greater  absurdity  be  conceived  than  to  treat 
the  "provisions  for  subsistence,"  which  we  had  in  our 
hands,  as  the  be-all  and  end-all  of  our  efforts,  if  they  failed 
to  furnish  the  purchase-money  for  the  gratification  of  our 
other  wants,  and  we  had  at  last  to  resort  to  home  manufac- 
tures ?  AYe  had  only  to  reach  out  and  gather  food  from  our 
boundless  acres,  and  then,  because  it  costs  us  little,  call  off  the 
people  and  their  masterful  energies  from  "  the  operation  "  of 
the  subjugation  of  a  continent  which,  in  the  fullness  of  time, 
the  God  of  nations  had  ordained  the  nation  to  undertake ! 

This  was  not  the  destiny  which  our  "  historical  ante- 
cedents "  forced  upon  us.    It  accorded  alike  with  the  divine 


292  PROTECTION    VS.   FREE   TRADE. 

ordering  of  events,  witli  tlie  ideals  of  the  people,  with  the 
demands  and  exigencies  of  the  great  movement  for  political 
and  commercial  freedom,  with  the  maxims  of  common 
sense,  and  with  the  canons  of  sound  political  economy,  upon 
which  alone  we  were  enabled  to  lead  the  kind  of  lives  we 
were  fitted  to  live.  The  American  people  were  neither 
tricked  into  this  order  of  development  by  monopolists,  be- 
trayed into  it  by  corruption,  nor  duped  into  it  by  greedy 
manufacturers.  It  was  the  natural  order  of  conducting  this 
mighty  "  operation,"  which  was  made  possible  because  food 
was  plenty,  and  "  cost  of  production  "  was  low.  It  was  the 
only  method  by  which  the  vast  resources  of  the  land  could 
be  made  contributory  to  the  weKare  of  the  people  possess- 
ing them.  "We  are  engaged  in  a  common  cause — farmer, 
manufacturer,  and  laborer — of  supplying  the  "  necessities, 
conveniences,  and  amusements"  of  each  other.  It  is  not 
money  values  we  ask  ;  it  is  the  commodities  themselves  we 
make  and  divide,  to  each  his  share  in  the  production.  The 
land-owner,  as  such,  has  no  distinct  right  nor  distinct  inter- 
est in  any  different  proportion  of  distribution.  In  his  be- 
half, it  is  urged  that  "  we  can  not  afford  to  compete  in  any 
industry  which  will  not  pay  here  as  well  as  those  which 
have  special  advantages  here.  If  we  can  not  compete,  it  is 
because  we  can  not  afford  to  compete.  We  are  too  tvell 
ojfP  This  would  be  like  the  workman  who  dropped  his 
tools  and  quit  work,  for  the  reason  tliat  he  has  "  provisions 
for  his  subsistence,"  without  the  ability  to  buy  and  enjoy 
anything  else.  When  we  steadily  contemplate  the  full 
meaning  of  the  proposition  that  the  United  States  are  to 
drop  their  tools  and  quit  all  work  for  the  reason  that  food 
is  cheap,  we  may  thank  the  Providence  which  has  superin- 
tended us  that  the  free-trade  doctrinaire  is  a  recent  prod- 
uct ;  and  we  may  rely  on  the  sturdy  common  sense  of  the 
people  that  they  will  never  accept  his  teaching. 


COST   OF   PRODUCTIOX— A  PARADOX.  293 

The  early  statesmen  looked  out  upon  the  dimensions  of 
the  republic,  and  took  an  inventory  of  its  effects.  I  know 
of  no  better  summary  of  them  than  I  find  in  the  rhapsody 
of  Prof.  Perry.  The  Professor  endeavors  to  break  the 
force  of  the  facts  by  thrusting  between  them  his  irrelevant 
suggestions :  "  The  idea  that  the  United  States,  with  a 
greater  variety  and  abundance  of  natural  resources  than 
any  other  country  on  the  globe,  with  an  industrious,  en- 
terprising, and  skillful  people,  with  mountain-streams 
which  leap  to  the  wheels  of  industry  with  a  song,  with 
forests  and  coal-fields  and  mines,  with  marts  and  markets 
and  navigable  rivers,  with  a  genius  for  traffic  and  a  keen 
eye  to  profit,  the  idea  that  the  United  States  is  to  be  re- 
duced to  a  mere  farming  country,  unless  Government  can 
be  coaxed  to  tax  foreigners  and  citizens  in  behalf  of  some 
branches  of  manufacture,  which  are  asserted  to  be  other- 
wise unprofitable,  is  too  ridiculous  for  serious  repetition. 
Why?  Ho  nation  of  the  earth  has  such  facilities  for 
manufacturing  /  the  raw  materials  are  here,  the  food  is 
here  in  dbounding  measure  ;  the  instruments  are  here  in 
water,  wood,  and  coal  j  cattle  and  horses  and  ])astures  are 
here  /  everything  is  here  which  a  nation  can  ask  for  with 
which  to  produce  either  directly  what  is  wanted,  or  indi- 
rectly that  with  which  to  purchase  at  the  cheapest  rates 
what  is  wanted  abroad ;  and  if  God  shall  give  us  grace  to 
mind  our  own  business,  to  avoid  entangling  alliances  and 
wars,  to  get  and  keep  a  sound  money,  and  to  rise  above 
the  silly  jealousies  which  have  hitherto  restricted  trade — 
we  shall  yet  be  the  bee-hive  of  the  nations,  the  chosen 
home  of  the  industrial  and  civilizing  arts." 

My  good  Professor,  there  is  something  yet  lacking  in 
your  inventory.  You  omit  the  only  factor  which,  on  your 
philosophy,  can  start  this  vast  complexity  of  industry.  We 
want  men  who  will  consent  to  labor  on  the  terms  of  the 


294  PROTECTION  VS.   FREE  TRADE. 

European  laborer — men  wlio  -vnll  consent  to  lower  the 
standard  of  their  lives  to  that  of  tlie  European,  reduced 
to  the  hopeless  and  helpless  slavery  of  industrial  systems. 

By  the  terms  of  your  argument  you  make  the  returns 
for  rude  labor  spent  on  the  soil  operate  as  a  premium 
against  industries  involving  sldll  and  capital.  The  very 
exigencies  of  your  logic  compel  you  to  waste  intelligence, 
energy,  inventive  talent,  educational  power,  in  vocations 
where  they  are  useless.  You  want  us  to  raise  exportables, 
in  which  "  cost  of  production  "  is  low.  Why  have  not  the 
kind  of  people  you  describe  entered  upon  the  possessions 
you  so  glowingly  catalogue  ?  What  is  the  economic  reason 
why  we  never  started  on  our  career,  until  7xstrictions  of 
some  sort  gave  us  "  a  lift "  ?  Do  you  know  of  anybody 
who  will  or  can  enter  npon  them  "  under  freedom  "  ?  You 
think  we  can,  now.  Prof.  Sumner  thinks  we  can  not,  and 
ought  not  to  ;  we  are  too  rich  to  do  so  now ;  we  must  wait 
until  we  can  afford  to  take  hold  of  our  resom'ces. 

What  are  "industrious  and  enterjirising  and  skillful 
people  "  without  a  field  of  employment  ?  What  are  "  our 
mountain-streams"  without  an  industry  to  which  they  can 
leap  ?  What  are  "  our  forests,"  if  we  are  to  get  our  lumber 
from  Canada?  Wliat  are  " coal-lields,"  if  we  are  to  get 
our  coal  from  Nova  Scotia  ?  What  is  the  use  of  "  mines," 
if  we  are  to  get  our  metal  fabrics  from  England  ?  What 
are  our  "  raw  materials,"  if  we  are  to  get  our  woolen  goods 
from  Germany,  our  cotton  goods  from  Manchester,  and  our 
hemp  from  Kussia  %  What  are  "  cattle  and  pastures,"  if  we 
are  to  get  our  wool  from  Australia  and  our  tallow  from 
the  Baltic  ?  What  are  "  marts  and  markets"  without  prod- 
ucts in  them  ?  What  boots  it  that  we  have  a  "  genius  for 
traffic  and  a  keen  eye  for  profit,"  if  they  are  to  be  wasted 
in  "  the  clash  of  chaotic  cupidities  "  which  marks  the  world's 
market?     AVhat  is  the  good  of  all  these  resources,  if  we  are 


COST  OF  PRODUCTION— A  PARADOX.        295 

not  to  enter  upon  their  enjo}Tnent  ?  Wlij  have  we  not 
entered  upon  their  enjoyment  except  under  restrictions  ? 
You  have  denounced  througli  six  hundred  pages  of  jour 
book  on  "  Political  Economy  "  the  men  who  have  endeav- 
ored to  appropriate  these  bounties,  as  robbers,  monopohsts, 
lobbyists,  parasites,  thieves.  You  know  there  is  not  an 
item  in  your  list  which  your  theory  of  "  advantageous  in- 
dustries "  allows  us  to  touch,  excej^t  agricultural  j)roducts. 
You  have  emptied  the  nation  of  the  power  to  apply  its 
labor  to  any  occupation,  except  the  soil,  in  which  the  forces 
of  nature  supplement  its  returns,  and  in  which  you  pride 
yourself  that  you  have  shown  that  the  "  cost  of  produc- 
tion "  is  low.  These  are  the  products  which  you  say  should 
constitute  the  outgoing  cargoes  for  which  in  retm'n  we  are 
to  receive  the  cotton  and  metal  fabrics  of  England,  the 
china  of  France,  the  woolen  goods  of  Germany,  the  coal 
of  Xova  Scotia,  the  hemp  and  tallow  of  Russia,  the  wool 
of  Australia,  and  the  lumber  of  Canada.  In  these  products 
of  the  industry  of  America,  according  to  the  cejisus  of 
ISSO,  our  own  laborers  added  81,200,000,000  to  our  stock, 
which  products  in  market  were  a  market  for  other  $1,200,- 
000,000  worth  of  other  American  labor — American  labor, 
mind  you.  There  is  not  a  single  one  of  these  industries 
which  you  do  not  denounce  as  "unproductive,"  as  "an 
abomination  "  when  carried  on  under  "  protective  taxes  " 
— for  so  you  prefer  to  denominate  the  scheme  of  direct, 
home  production.  You  say  they  do  not  j)ay.  You  cram 
a  transparent  fallacy  into  that  use  of  the  word  "pay." 
Your  inventory  is  at  last  a  humbug,  and  your  radiant  pict- 
ure is  a  deceitful  mirage. 

You  shut  the  American  people  up  to  the  choice  be- 
tween the  horns  of  a  dilemma.  They  will  never  become 
prqfitahle,  in  your  sense  of  the  word,  until  we  can  compete 
in  the  markets  of  the  world  with  them.     This  can  come 


296  PROTECTION  VS.   FREE  TRADE. 

about  on  one  of  two  conditions  :  Either  our  workmen  must 
consent  to  reduce  tlieir  sliare  of  tlie  "  cost  of  production," 
reckoned  in  wages,  or  they  must  by  increased  skill  render 
tlie  "  cost  of  tlieii*  labor  "  less.  They  must  become  more 
expert  and  efficient  in  proportion  to  their  higher  wages. 
On  the  latter  condition,  without  restriction,  we  never 
should  have  entered  upon  these  forms  of  industry.  Achil- 
les himself  can  not  overtake  the  tortoise  unless  he  starts. 
Industrial  skill  and  efficiency  are  only  attained  by  practice, 
generations  after  generations — years  after  years.  Our  pres- 
ent industrial  scheme  is  a  process  of  education ;  and  its  full 
effects,  as  an  educational  process,  are  daily  required  to  ena- 
ble us  to  "  keep  up  " — to  hold  our  own  in  the  race.  That 
we  could  rise  jyer  saltum  under  the  philosophy  of  laissez 
faire  from  an  agricultural  state  to  a  highly  organized,  in- 
dustrial state,  is  impossible.  As  is  said  by  Bobert  Scott 
Moffat :  "It  is  impossible  for  an  unorganized  industry,  at 
any  point  of  its  progress,  to  attack  an  organized  one  with- 
out entailing  loss  and  submitting  to  temporary  disadvan- 
tage ;  and  if  immediate  advantage  alone  is  to  be  consulted, 
the  industry  of  such  a  country  must  forever  remain  iinor- 
(janizedy  ("  Economics  of  Consumption.")  Mr.  Mill  has 
said  as  much. 

On  the  fonner  condition — reduced  wages — we  do  not 
want  them  on  any  terms. 

Many  excellent  people  have  denounced  Dr.  Malthus  for 
enunciating  his  law  of  population,  as  if  he  had  enacted  it.  I 
commend  his  words  to  free-trade  promoters :  "  If  a  country 
had  no  other  means  of  gro\\dng  rich,  except  by  seeking 
success  in  the  struggle  with  other  countries  at  the  cost  of 
the  reduction  of  the  wages  of  labor,  I  would  unhesitatingly 
say,  '  Away  with  such  riches.'  It  is  much  to  be  desired  that 
the  working-classes  should  be  well  remunerated,  and  this, 
for  a  reason  much  more  important  than  all  the  considerar 


COST   OF   PRODUCTION— A.   PARADOX.  297 

tions  relating  to  wealth — that  is,  the  happiness  of  the  great 
mass  of  society.  I^othing  is  more  detestable  than  the  idea 
of  knowingly  condemning  the  laboring-classes  to  cover 
themselves  with  rags,  to  lodge  in  wretched  huts,  to  enable 
ns  to  sell  a  few  raw  stuffs  and  calicoes  to  foreign  coun- 
tries." 

Rather  let  us  rejoice  that  God  has  given  us  grace  to 
mind  our  o\vn  business,  has  enabled  us  to  avoid  entangling 
alliances  and  wars,  and  has  kept  us  out  of  the  maelstrom  of 
foreign  industrial  machinery  which  would  have  ingulfed 
our  capital  and  labor. 

The  assumption  is  that  under  free  trade  we  shall  not 
abandon  any  group  of  industries  worth  pursuing.  Prof. 
Cairnes  thinks  we  could  rely  on  the  "exceptional  bounty 
of  nature,"  and  worry  along  with  the  industries  in  which 
his  economic  paradox,  that  a  high  rate  of  industrial  remu- 
neration was  only  evidence  of  a  low  cost  of  production,  was 
applicable.  "  Perhaps  I  shall  here  be  asked  how,  if  the 
case  be  so,  the  fact  is  to  be  explained,  since  fact  it  un- 
doubtedly is,  that  the  people  of  the  United  States  are  un- 
able to  coiTvpete  in  neutral  marhets^  in  the  sale  of  certain 
important  wares,^  with  England  and  other  European  coun- 
tries. Ko  one  will  say  that  the  people  of  !New  England, 
New  York,  and  Pennsylvania  are  deficient  in  any  indus- 
trial qualities  possessed  by  the  workmen  of  any  country  in 
the  world.  How  happens  it  then,  that,  enjoying  industrial 
advantages  superior  to  other  countries,  they  are  yet  unable 
to  hold  their  own  against  them  in  the  general  markets  of 
commerce  ?  I  shall  endeavor  to  meet  this  objection  fairly, 
and,  in  the  first  place,  let  me  state  what  my  contention  is 
with  regard  to  the  cost  of  production  in  America.  I  do 
not  contend  that  it  is  low  in  the  case  of  all  commodities 

*  According  to   "  Schedule  A,"   the  consumption  of  these  "  important 
wares  "  in  the  United  States  amounts  to  $3,000,000,000  annually. 


298  FEOTECTIOX    VS.   FREE   TRADE. 

capable  of  being  produced  in  tlie  country,  but  only  in  that 
of  a  large,  very  important,  but  still  limited,  groujpP 

Here  we  are  back  again  to  the  agricultural  group.  All 
the  industries  outside  of  this  group,  lie  takes  the  trouble  to 
say  in  words,  would  not  be  extinguished  by  free  trade. 
Great  Britain  would  still  continue  to  produce  some  corn, 
and  the  United  States  some  coal  and  iron,  and  some  textile 
fabrics.  Transportation  over  great  distances  to  some  of 
the  inland  markets  of  the  United  States  might  operate  «s 
a  tariff.  "  It  is  probable  tliat  the  abolition  of  the  high 
import  duties  now  imposed  by  the  latter  country  would 
lead  to  some  more  or  less  considerable  readjustments  of  the 
proj^ortions  in  which  the  industries  they  occasion  are  car- 
ried on ;  but  this  is  a  very  different  thing  from  the  extinc- 
tion of  those  industries.  .  .  .  The  capital  now  employed  in 
the  United  States  in  developing  resources  which  would  he 
better  reserved  for  another  day,  would  not  be  slow  in  finding 
employment  in  more  profitahle  channels.  ...  It  can  not, 
therefore,  be  denied  tliat  under  free  trade  American  manu- 
facturers would  not  improbably  have  to  undergo  the  patri- 
otic anguish  of  finding  themselves  undersold  in  some 
kinds  of  goods  by  foreign  merchants  in  their  own  mark- 
ets. But  there  would  be  no  need,  therefore,  for  them  to 
despair." 

This  is  very  kind  in  the  Professor.  Somehow  the  phi- 
losophers in  their  study-chambers  never  tell  us  what  these 
more  profitable  channels  are.  What  are  we  to  do,  Messrs.  . 
Professors  ?  Answer  in  facts,  and  not  in  rhetorical  vague- 
ness and  audacious  guess-work.  The  business  men  of 
America  have  been  fretting  on  the  edges  of  all  their  re- 
sources for  a  century.  It  is  probable  they  have  discovered 
all  there  is  to  discover.  There  is  nothing  to  do  except  to  go 
on  and  continue  to  produce  the  things  we  must  and  will 
have,  and  produce  them  under  the  American  conditions, 


COST  OF  TRODUCTION— A  PARADOX.        299 

under  iwo1:ection.  Tliis  gives  us  access  to  the  grand  in- 
ventory of  resources  so  eloquently  set  out  by  Prof.  Perry. 
We  either  are  or  are  not  worthy  of  them. 

Our  old  critical  friend  Prof.  Leslie  (who  was  a  free- 
trader all  the  time  we  have  been  reading  his  criticism)  is 
as  dogmatic  as  any  otlier  professor  when  he  gives  us  an 
Englishman's  advice  as  to  what  Americans  ought  to  do : 
"  The  best  economy,  of  course,  would  have  been  for  Ameri- 
can capital  to  conhne  itself  to  the  fields  in  which  it  had 
superior  productiveness,  awaiting  a  rise  ofivages,  and  in  the 
cost  of  coal-mining  in  England,  for  competition  in  others." 
("Fortnightly  Keview,"  October,  1881.)  This  lets  the 
whole  free-trade  cat  out  of  the  bao;.  Rates  of  wagres  will 
rise  in  England,  the  productiveness  of  our  fields  will  con- 
stantly diminish,  our  wages  will  come  down,  we  shall  be 
on  equahty  with  England.  Then  we  shall  be  so  poor  that 
we  can  afford  to  compete  with  England — we  are  too  rich 
to  do  it  now.  It  is  Prof.  Sumner's  old  proposition :  "  If 
we  can  not  compete,  it  is  because  we  can  not  afford  to  com- 
pete. We  are  too  well  off."  Most  practical  business  men, 
foreseeing  the  time  when  they  must  build  an  extension  to 
their  works,  would  do  it  when  and  while  they  were  well 
enough  off  to  afford  it,  and  not  wait  until  forced  by  their 
necessities  to  go  into  a  new  enterprise,  under  compulsion 
of  poverty — especially  as  in  either  event  it  must  be  done 
at  their  own  cost,  and  under  the  conditions  of  the  average 
efficiency  of  the  people  as  a  whole.  And  Mr.  Mill  is  on 
record  as  agreeing  with  the  practical  business  men. 

Few  will  have  had  the  patience  to  follow  this  ingenious 
and  subtle  argmnent,  by  which  free  trade  was  going  to 
determine  for  us  what  to  do — under  the  notion  of  "  cost  of 
production."  It  has  landed  us  in  the  old  bog.  Having 
consciously  failed  to  enlighten  us,  in  this  regard,  we  are 
exhorted  by  Prof.  Cairnes  to  abandon  protection  and  go 


300  TROTECTION    VS.  FREE  TRADE. 

into  the  general  business  of  civilization.  "  As  a  sclieme 
for  promoting  civilization,  protection  amounts  to  a  plan 
for  putting  an  end  to  international  trade — putting  an  end 
to  the  chief  occasion  and  most  enduring  motive  for  the  in- 
tercourse of  mankind,  .  .  .  free  trade  being  one  of  the  prin- 
cipal and  most  powerful  of  civilizing  agencies."  "What  it 
really  puts  "  an  end  "  to,  what  it  is  "  the  chief  occasion  and 
most  enduring  motive  "  to,  is  the  occasion  and  motive  to 
have  the  manufactures  of  the  world  carried  on  in  the  island 
of  Great  Britain,  and  to  have  Americans  track-farm  it  for 
them.  No  American  will  have  any  doubt  that  when  it 
comes  to  interaational  trade  in  civilization,  our  exports  will 
largely  exceed  the  im]30rts.  I  have  seen  a  calculation  made 
that,  for  every  missionary  England  has  sent  to  foreign  lands, 
she  has  opened  a  market  for  English  goods  to  the  amount 
of  fifty  thousand  pomids.  And  the  London  "  Times  "  has 
given  expression  to  the  "  patriotic  anguish  "  which  EngHsb- 
men  underwent  when,  in  the  Russian  war,  English  troops 
were  compelled  to  "  kill  a  customer  or  a  debtor  of  Eng- 
land." At  the  same  time  English  gunsmiths  sold  guns 
to  kill  English  soldiers,  because  there  must  be  no  interfer- 
ence with  trade.  Americans  are  asked  to  furnish  the 
ammunition  with  which  they  may  be  themselves  slaugh- 
tered. 

Prof.  Cairnes  advises  thus  :  "  If  they  "  (the  Americans) 
"  desire  to  command  a  market  for  their  products  in  all  quar- 
ters of  the  world,  they  must  be  prepared  to  admit  the  prod- 
ucts of  other  countries  freely  to  their  own  markets,  and 
must  learn  to  seek  the  benefits  of  international  trade,  not 
in  the  vain  ambition  of  underselling  other  countries,  and 
so  making  them  pay  tribute  in  gold  and  silver  to  the  United 
States,  but  in  that  which  constitutes  its  proper  end  and 
only  national  purjoose — the  greater  cheapening  of  its  com- 
modities, and  the  increased  abundance  and  comfort  which 


COST  OF  PRODUCTION— A  PARADOX.  301 

result  to  the  whole  family  of  mankind  P  This  last  enter- 
prise seems  rather  an  indefinite  one  for  American  states- 
men to  enter  upon,  charged,  as  they  are  especially,  with 
the  welfare  of  the  people  of  the  United  States.  Our  pres- 
ent mission  is  to  make  commodities  cheap  and  abundant 
for  ourselves,  and  we  have  been  fairly  successful  so  far. 


CHAPTER  Xiri. 

A    CASE   IN    rOES'T — THE   AUSTEALIA    EPISODE. 

This  business  of  "  advantageous  industries  "  and  "  cost 
of  production"  lias  received  recent  illustration  in  actual 
history.  Gold  was  discovered  in  Australia  in  1810.  Let 
us  look  at  the  course  of  development  there,  in  the  light  of 
its  economic  and  social  growth.  It  sheds  hght  on  very 
many  phases  of  economic  problems.  At  the  time  of  the 
discovery  of  gold  in  Austraha  in  1851  it  was  a  grazing 
country,  with  extensive  areas  of  rich,  fertile  lands.  Wool 
and  tallow  were  its  principal  exports.  The  wages  of  com- 
mon labor  were  about  one  dollar  and  a  quarter  per  day. 
Upon  the  gold  discoveries,  a  common  laborer  could  earn  at 
the  mines,  by  simple  processes  of  labor  involving  little  capi- 
tal and  moderate  skill,  five  dollars  per  day  ;  that  is,  he 
could  produce,  by  washing  the  sand,  enough  gold  to  be  of 
that  worth — say,  one  quarter  of  an  ounce.  The  cost  of  pro- 
ducing gold  thus  became,  then  and  there,  low.  Wages 
reckoned  in  gold  were  high,  so  long  as  gold  in  the  outside 
world  held  its  exchange  value.  Immediately  the  rate  of 
wages  in  the  whole  country  rose  to  the  rate  of  earnings  in 
the  gold-fields.  An  employer  was  compelled  to  pay  quad- 
ruple wages ;  the  price  of  all  Australian  productions  rose 
in  the  same  proportion.  In  the  course  of  two  or  three 
years  the  more  accessible  and  richer  mines  became  ex- 
hausted ;  processes  became  more  expensive.  The  rate  of 
earnings  in  gold-digging  were  reduced  to  about  two  dollars 


A  CASE  IN  POINT— THE  AUSTRALIA  EPISODE.  303 

and  a  half  per  day,  and  this  for  some  years  was  the  cost  of 
labor  there.  The  returns  to  labor  in  the  most  "  advanta- 
geous industry  "  and  in  ordinary  callings  met  at  the  average 
about  midway  between  the  ante-gold  rates  and  the  highest 
rates  under  their  most  efficient  conditions.  The  gold- 
digger  was  compelled  to  share  his  abundance  with  the 
laborers  who  prosecuted  the  unprofitable  industries.  He 
could  not  have  them  serving  him  in  Australia  without 
parting  with  a  share  of  his  earnings  at  the  point  of  his 
superiority  ;  and  the  people  of  Australia,  as  a  whole,  took 
the  advantage  of  the  gold  discoveries  at  an  averaged  rate. 
These  people  were  a  tax  on  him.  If  the  miner  could  have 
gotten  along  without  neighbors  and  helpers,  he  would  have 
realized  the  whole  of  the  fruits  of  his  most  advantageous 
industry ;  but,  under  an  irrepealable  law  of  society,  he  was 
compelled  to  divide.  Whoever  was  allowed  to  go  to  Aus- 
tralia and  to  work,  was  necessarily  permitted  to  share  in 
the  averaged  results. 

Inasmuch  as  the  population,  in  the  main,  took  to  the 
gold-diggings,  and  inasmuch  as  they  could  not  subsist  on 
the  gold  itself,  they  were  compelled  to  jpart  with  it.  So  far 
as  they  could  not  supply  their  wants  by  Australian  produc- 
tions, they  were  compelled  to  export  it  as  the  only  and  best 
means  of  payment  for  imports.  The  wages  of  shepherds 
and  ranchmen  had  doubled,  and  the  cost  of  raising  wool 
doubled  also.  The  market  for  wool  was  in  Europe,  and 
the  price  of  wool  there  had  not  doubled ;  and  as  Europe 
was  not  dependent  on  Australia  for  its  supplies,  wool  and 
tallow  could  be  no  longer  exported.  An  unexpected  con- 
sequence saved  the  industry.  Previously,  butcher's-meat 
had  had  no  market  at  home,  and  grazing  had  been  carried 
on  principally  for  the  products  in  wool  and  tallow.  The 
great  influx  of  population  now  gave  them  a  sale  for  their 
meats,  and  they  were  then  enabled  to  continue  the  exporta- 


304  PROTECTION    VS.  FllEE   TRADE. 

tion  of  tlieir  old  products  at  old  prices ;  but  this  was  mere- 
ly an  incident,  or  rather  an  accident.  The  great  industry 
was  gold-uiining.  So  long  as  it  remained  the  most  advan- 
tageous industry,  all  the  others  were  merely  ancillary  to  it 
— mere  instruments  to  supply  food  and  clothing  to  those 
actually  employed  in  it.  How  did  it  aifect  them  in  rela- 
tion to  other  nations  ? 

Whereas  the  colony  formerly  supplied  her  own  wants 
by  her  own  productions  of  butter  and  lumber,  she  now  im- 
ported her  supplies  of  the  former  from  Ireland  and  the 
latter  from  the  Baltic.  Her  facilities  in  raising  gold  were 
so  far  superior  to  the  facilities  of  Ireland  and  Russia,  that 
it  was  her  interest  to  turn  her  labor  and  capital  to  gold- 
mining  rather  than  to  farming.  Her  fields  were  fertile, 
but  they  could  not  hold  their  own  in  competition  with 
gold-mines.  It  resulted  that  nothing  which  could  be  im- 
ported was  now  made  in  the  colony.  The  price  of  labor 
was  so  high  that  she  could  not  afford  to  compete  with  for- 
eign countries.  £ut  that  price  was  high  because  the  cost 
of  gold  was  low — that  is,  the  returns  for  labor,  rechoned  in 
its  jproduci^  gold,  were  high.  Reckoned  in  the  commodity 
which  that  labor  brought  forth — gold — these  were  high  re- 
turns. Gold  in  Australia  was  cheap,  measured  in  the 
effort,  sacrifice,  which  procured  it.  In  Australia,  prices 
were  high,  commodities  were  high.  In  other  countries 
gold  maintained  its  exchange  value,  its  purchasing  power 
over  other  commodities.  In  Australia  there  was  a  rise  in 
prices  corresponding  to  the  fall  in  the  cost  of  gold.  If  the 
supply  of  gold  under  its  lessened  cost  could  have  been  kept 
up  long  enough  and  in  sufficient  volume,  prices,  reckoned 
in  gold,  all  over  the  world  would  have  risen,  and  the  equi- 
librium would  have  been  restored  hy  a  fall  in  the  price 
of  gold.  But,  as  it  was,  the  volume  of  gold  currencies 
throughout  the  world  was  too  large  to  be  sensibly  affected 


A  CASE    IN  POINT— THE  AUSTRALIA  EPISODE.         305 

in  value  by  the  reduced  cost  of  it  in  Australia  and  Cali- 
fornia ;  and,  further,  in  due  course  of  time  the  increased 
cost  of  procuring  gold  from  the  mines  of  both  coimtries 
had  so  far  destroyed  their  special  advantages  in  its  produc- 
tion that  commerce  has  returned  to  its  normal  relations. 
Both  manufacturing  and  agricultural  pursuits  have  been  re- 
sumed. In  both  countries  the  actual  wealth  is  mcreasinff, 
and  the  decrease  in  the  productiveness  of  gold-mining  has 
removed  an  actual  barrier  to  their  social  and  economic 
progress.  The  special  industry  had  drawn  all  labor  and 
ca^^ital  to  it ;  but  the  wealth  of  the  country  had  been  only 
such  as  could  be  effected  by  exchanges.  They  did  not  im- 
port capital,  but  consumable  goods. 

If  studied  in  detail,  tlie  Austrahan  episode  furnishes  a 
study  of  many  sides  of  the  problem  of  international  trade. 

It  shows  in  what  manner  the  existence  of  a  specially 
advantageous  industry  operates  as  a  barrier  to  the  prosecu- 
tion of  the  less  advantageous  ones,  or  rather,  how,  if  open 
to  all,  it  raises  wages  in  all  departments  to  an  equality 
with  those  to  be  won  in  it.  It  explains  what  the  free- 
trader means  when  he  says  we  "can  not  afford  to  com- 
pete" with  other  nations  where  wages  are  less.  He  means 
to  say  that  we  ought  to  stay  in  the  advantageous  pursuit 
and  not  try  to  compete  in  the  others.  He  argues  that  pres- 
ent current  prices  are  the  criterion  upon  which  we  ought 
to  conduct  our  exchanges.  What  he  overlooks  is  his  owti 
error  in  assuming  that  because  we  might  advantageously 
effect  some  exchanges — procure  a  limited  amount  of  foreign 
manufactured  commodities  in  that  way — we  might  with 
equal  advantage  effect  all  our  exchanges  and  obtain  all  the 
supplies  toe  required  in  like  manner.  This  is  the  old  fal- 
lacy of  division  with  which  we  have  already  dealt. 

Let  us  now  substitute  food  in  the  United  States  for 
gold  in  Australia,  and  see  how  the  analogies  hold  out : 


306  PROTECTION    VS.  FREE  TRADE. 

Gold  is  an  article  in  universal  demand,  and  an  over- 
production is  a  danger  which  no  pains  need  be  taken  to 
prevent.  Ko  gold-miner  need  anticipate  a  glut  in  the  gold 
market.  At  all  events,  prices  throughout  the  world  have 
not  risen  at  all  in  the  proportion  in  which  the  cost  of  gold 
in  AustraUa  and  California  has  been  reduced. 

Wheat  is  a  product  annually  renewed,  and  the  history 
of  prices  shows  the  wide  and  violent  fluctuations  of  its 
value  in  the  world's  market.  Especially  are  the  foreign 
markets  accessible  to  the  American  surplus  characterized 
by  great  uncertainties  in  value  and  requirements. 

Gold  was  of  no  value  in  Australia,  except  as  it  vms 
used  for  the  purposes  of  foreign  trade.  The  miners  and 
the  people  there  could  derive  no  benefit  from  it  except  so 
far  as  they  parted  with  it.  If  it  could  have  been  con- 
sumed or  used  for  purposes  of  further  production  in  Aus- 
tralia, can  any  one  doubt  that  its  wealth,  as  a  colony,  would 
have  been  doubled  in  virtue  of  the  double  production  it 
could  have  provoked  by  expending  it  on  new  creations  ? 

V^heat  in  the  United  States  has  the  function  of  being 
directly  applied  to  the  subsistence  of  laborers  while  enter- 
ing upon  operations  directed  to  further  production.  The 
closer  the  supply  was  held  to  the  domestic  demand,  the  less 
would  be  the  loss  in  its  purchasing  power,  and  the  greater 
the  gross  annual  product  of  the  industry  of  the  nation  of 
native-born  laborers,  supplemented  by  immigration  which 
supplied  all  deficiencies. 

In  Australia,  the  disadvantages  which  the  producers  of 
commodities  other  than  gold  labored  under  were  too  gi'eat 
and  exceptional  to  enable  them  to  enter  into  competition 
with  the  gold-miners  in  articles  for  export.  In  proportion 
as  the  cost  of  procuring  gold  rose,  they  were  enabled  to  re- 
sume the  production  of  other  merchandise  for  exj^orts. 

In  the  United  States  the  difference  between  advantages 


A  CASE  IN  POINT— THE   AUSTRALIA  EPISODE.  307 

of  raising  wlieat  and  manufacturing  commodities  was  never 
so  wide  and  exceptional.  The  constantly  increasing  pro- 
portion in  which  we  are  exporting  manufactured  goods 
shows  a  constant  tendency  to  the  equalizing  the  facilities 
of  production  between  manufacture  and  agriculture.  One 
is  tempted  to  wonder — if  the  lamentations  of  the  free- 
trader, that  we  do  not  export  more  manufactured  goods, 
should  be  hushed,  and  if  we  should  export  food,  raw  mate- 
rials, and  the  products  of  our  mills — how  foreigners  are  to 
pay  us ;  what  are  they  to  do  for  us ;  what  imports  are  to 
pay  for  all  these  exports.  The  truth  is,  when  we  get  to 
supplying  all  our  own  wants,  foreign  trade  will  cease,  as  it 
ought  to.  ISTobody  wants  foreign  trade  for  itself.  All  the 
high-sounding  talk  about  our  sails  whitening  all  the  seas  is 
nonsense  and  buncombe. 

The  highest  taxes  any  nation  pays  are  the  taxes  levied 
under  the  form  of  transportation,  especially  in  the  carriage 
of  merchandise  which  can  be  produced  where  it  is  con- 
sumed. Commerce  is  the  penalty  of  making  things,  or  of 
having  things  made,  in  the  wrong  place. 

We  are  all  familiar  with  the  habit  of  free-traders,  and 
other  loose  thinkers,  to  measm^e  the  prosperity  of  a  nation 
by  the  amount  of  its  foreign  commerce.  The  tnie  measure 
is  in  its  domestic  exchanges.  The  total  amount  of  British 
exports,  with  its  boasted  mastery  of  the  world's  commerce, 
was  in  1880,  $1,400,000,000.  For  the  same  year  the  peo- 
ple of  the  United  States  made  exchanges  among  themselves, 
through  the  agencies  of  railroads  alone,  and  exclusive  of  all 
other  instrumentalities  of  trade,  such  as  ships,  wagons, 
boats,  and  animals,  to  the  extent  of  over  $12,000,000,000 : 
or,  in  other  words,  each  four  millions  of  our  fifty  millions 
exchanged  commodities  among  themselves,  each  year,  to 
the  extent  of  more  than  $1,000,000,000 — nearly  equal  to 
the  entire  export  trade  of  Great  Britain. 


308  PROTECTION    VS.  FREE  TRADE. 

Prof.  Caimes  has  remarked  of  tlie  phenomena  in  Aus- 
tralia :  "  The  foreign  trade  of  Victoria  presents  the  singular 
and  almost  unique  spectacle  of  a  steady  decline  in  its 
amount  over  a  period  marked  by  an  extraordinarily  rapid 
growth  of  population  and  general  loealih.  I  have  no  re- 
turns of  the  population  of  that  colony  for  1856,  but  it  was 
probably  between  300,000  and  400,000;  in  1861  it  was 
511,000,  and  in  1870  729,000.  In  other  words,  the  popu- 
lation must  have  nearly  doubled  itself  in  these  sixteen 
years ;  the  general  prosperity  of  the  country  during  the 
same  time  being  almost  unexampled.  But  the  noteioorthy 
circumstance  is,  that  while  the  country  ivas  then  prosper- 
ing, its  external  trade  was  undergoing  constant  contrac- 
tion, falling  from  a  total  of  $77,445,000  in  1856,  to 
$62,350,000  in  1870.  The  fact,  Irnay  mention  in  passing, 
shows  how  little  the  foreign  trade  of  a  country,  as  meas- 
xired  hy  its  exports  and  imports,  furnishes  a  correct  cri- 
terion of  its  industrial  progress  or  growth  in  real  wealth. 
.  .  .  The  result  has  been,  that  from  being  a  lai'ge  importer 
of  breadstuff s,  butter,  beer,  boots  and  shoes,  provisions, 
spirits,  etc.,  Victoria  has  either  discontinued  altogether,  or 
greatly  curtailed  her  importation  of  all  these  commodities, 
which  she  now  produces  from  her  own  internal  resources.  Is 
this  course  of  development  for  the  advantage  of  Victoria  ? 
Plainly,  I  thinh,  if  we  have  regard  of  her  general  inter- 
ests, social  and  p)olitical,  as  well  as  pecuniary,  we  must 
answer  in  the  affirmative^  Then,  as  if  remembering  that 
he  was  a  professor  of  the  science  of  orthodox  English 
political  economy,  he  feels  constrained  to  add  :  "  Though, 
as  economists,  we  must  also  recognize  that,  looking  at  the 
question  from  a  purely  material  stand-point,  this  affirma- 
tion can  not  be  made  good,  since  it  certainly  is  a  fact  that 
the  diminishing  returns  of  her  gold-mines  have  deprived 
her  of  that  command  of  foreign  markets  which  she  for- 


A  CASE  IN  FOINT— THE  AUSTEALIA  EPISODE.         309 

merlj  possessed ;  while  the  resort  to  her  own  fields  of  pro- 
duction in  lieu  of  foreign  markets,  being  as  it  is  a  dernier 
ressort,  can  not  but  indicate  a  diminishing  productiveness 
of  her  general  industry."  America  never  had  the  com- 
mand of  foreign  markets  with  her  wheat  as  Australia  liad 
with  her  gold,  for  many  and  obvious  reasons. 

The  whole  case  of  protection  might  be  risked  on  this 
concession :  "  The  general  interests,  social  and  political,  as 
well  as  pecuniary,"  of  Australia  have  been  advanced  by  a 
resort  to  her  own  fields  of  production,  after  her  people  had 
come  to  them  over  the  failure  of  a  specially  advantageous 
industry,  the  pursuit  of  which  alone  had  retarded  her  prog- 
ress and  her  wealth,  even  though  it  had  given  her  com- 
mand of  the  foreign  markets ;  and  that  an  industry  which 
yielded  the  precious  metals  themselves,  for  which  there 
was  an  unhmited  demand  in  the  markets  of  the  world. 

California  presents  precisely  similar  conditions  of  de- 
velopment— so  that  it  might  almost  be  said  that  her  spe- 
cial industry  had  been  a  curse  to  her  in  retarding  all  other 
industry. 

We  see  now  what  the  free-trader  means  by  "  advanta- 
geous industry  "  and  "  cost  of  production."  If  our  advantage 
consists  in  the  lower  cost  of  production  reckoned  in  labor 
and  sacrifice,  the  actual  difficulties  of  production,  we  can 
get  no  benefit  from  it  except  as  we  part  with  the  commod- 
ity produced  under  these  conditions.  The  farmer  himself 
must  part  with  his  surplus  either  at  home  or  abroad,  but 
the  nation  as  a  whole  is  not  under  that  necessity.  It  may 
provide,  by  a  protective  tariff  for  example,  for  its  consumj)- 
tion  at  home.  If  it  must  be  exported  in  order  to  evolve 
its  purchasing  power,  this  purchasing  power  may  be  lost, 
either  by  the  competitions  of  international  trade  which 
squeezes  out  all  the  value  except  what  is  conferred  by  the 
contributions  of  our  lal)or  estimated  on  the  Russian  and  In- 


310  PROTECTION  VS.   FREE  TRADE. 

dian  basis,  and  eliminate  all  the  valne  conferred,  as  a  gra- 
tuity, by  nature :  or  it  may  be  lost  by  the  breaking  down 
and  failure  of  the  foreign  market  to  take  it  off  our  hands, 
in  which  event  the  product  itself  perishes. 

In  the  former  case,  w^e  can  only  receive  remuneration 
for  labor,  which  must  issue  eventually  in  European  rates, 
and  so  lose  our  only  superiority  in  production  ;  in  the  lat- 
ter case,  we  can  not  part  at  all  with  om*  product,  and  are 
forced  back  to  domestic  markets  and  domestic  manufactur- 
ing, w'hich  we  can  have  only  on  the  condition  of  restrict- 
ing the  import  of  foreign  goods. 

There  is  no  other  escape  from  the  dilemma.  All  which 
only  shows  that  a  mere  bucolic  America  is  not  as  rich  as 
we  assume  it  to  be.  We  must  resort  to  our  other  fields  of 
production.     We  long  ago  reached  om*  dernier  ressort. 


CHAPTER  XIV. 

COMPETITION   IN   A  FOKEIGN    MARKET   COMPELS  US   TO  EXPOKT 
OUK   GRATUITIES. 

The  analysis  wliicli  we  have  been  making  under  the 
liead  of  "cost  of  production"  has  brought  us  to  a  crucial 
test.  We  are  now  face  to  face  with  another  awkward  ques- 
tion. Its  proper  solution  will  negative  the  whole  series  of 
propositions  not  proved,  and  assumptions  not  warranted, 
which  so  abound  in  the  writings  of  Profs.  Perry  and  Sum- 
ner, Mr.  David  A.  Wells,  and  the  propogandists  of  the 
Cobden  Club. 

The  people  of  the  United  States,  by  virtue  of  their  soil, 
climate,  rivers,  mines,  and  forests,  have  a  superiority  over 
other  nations  in  "  cost  of  production  "  in  a  certain  group  of 
industries. 

We  have  seen  that  the  result  of  competition  is  to  elimi- 
nate all  the  elements  of  value  except  the  onerous  contribu- 
tions of  man.  The  tendency  of  economic  laws  set  into  op- 
eration by  competition  is  to  equalize  values  with  the  labor 
and  abstinence  incorporated  in  commodities.  International 
commerce  now  takes  the  place  of  competition — sets  it  in 
operation  rather.  The  nature,  capacity,  and  occupations  of 
an  Enghshman,  a  German,  a  Frenchman,  and  an  American 
are  not  so  dissimilar  that  they  might  not  compete  on  equal 
terms,  and,  in  the  long  run,  with  equal  outcome.  Their  la- 
bor, their  skill,  and  their  endurance  would  be  equal  factors 
in  a  given  product.     But  to  the  labor,  skill,  and  endurance 


312  PROTECTIOX    VS.   FREE  TRADE. 

of  tlie  Americcan  are  added  tlie  natural  resources  of  a  new 
continent.  Jiach  nation,  as  a  ivhole,  has  the  use  of  its 
land  for  nothing.  In  the  case  of  tlie  United  States,  this 
possession  gives  tliem  a  vast  and  incalculable  advantage  in 
our  case,  not  in  the  selling  but  in  the  consuming  of  its  prod- 
ucts. How  far  will  free  foreign  trade — international  com- 
merce— render  that  which  is  a  gratuity  to  us,  a  common  pos- 
session to  other  nations  ?  We  are  monopolists  to  the  full 
extent  of  the  superior  productive  powers  of  the  soil  of  our 
great  territory.  The  monopoly  does  not  belong  to  the 
land-owner  as  such — it  does  not  run  with  the  land  into  the 
usufruct  of  the  citizen  alone,  in  whom,  as  an  economic 
and  political  expedient,  we  have  vested  private  title.  To 
what  extent  will  the  operations  of  foreign  commerce  level 
us  down  ?  How  far  shall  we  be  ingulfed  if  we  enter  the 
vortex  of  free  international  exchanges  ? 

It  seems  to  me  that,  if  we  are  allowed  to  discuss  this 
question  from  the  stand-point  of  American  nationality,  as 
a  question  of  the  wealth  and  welfare  of  the  citizens  of  this 
nation,  it  is  capable  of  a  definite  answer.  But  it  is  a  topic 
for  a  man  who  stands,  open-eyed,  in  the  daylight,  gazing 
on  actual  facts,  and  not  for  a  dreamer,  with  his  impalpable 
vision  of  universal  brotherhood,  or  the  blind  votary  seeking 
national  suicide  in  the  cause  of  universal  free  trade.  It 
may  be  that,  in  the  final  status  of  nations  and  humanity, 
we  shall  all  ride  upon  some  Mediterranean  Sea,  and 
that  we  shall  meet  our  brethren  of  other  races  and  cli- 
mates and  civihzations  upon  some  average  level.  In  the 
mean  time,  as  a  nation,  we  shall  best  pursue  Adam  Smith's 
system  of  natural  liberty  by  doing  the  best  we  can  for  our- 
selves. 

An  evident  economic  proposition  is  this :  that  by  the 
direct,  domestic  production  of  tlie  commodities  that  we 
need,  if  not  interdicted  by  "  the  nature  of  things,"  we  re- 


EXPORTATION  OF  OUR  GRATUITIES.  313 

tain  for  the  citizens  of  the  nation,  as  a  whole,  all  the  gratui- 
ties which  nature  has  conferred  upon  us. 

A  clearly  scientific  proposition  is  this  :  that  in  the  effort 
to  obtain  them  by  free  foreign  exchanges  we  shall  part 
with  these  gratuities — shall  surrender  our  position  as  pro- 
prietors, as  against  the  other  nations  of  the  world,  of  a 
monopoly  of  cheap  food  and  raw  materials ;  and  that  the 
food  and  raw  materials  which  we  export  will  bear  no  ex- 
change value  over  and  above  the  actual  labor,  sacrifice, 
effort,  which  we  have  expended  in  their  production. 

A  further  proposition,  true  alike  in  morals,  justice,  and 
economics,  is  this  :  that  a  commodity  which  is  cheap,  by 
reason,  not  of  an  effort  embodying  less  relative  skill  or 
labor  in  its  production,  but  of  less  highly  remunerated 
labor,  is  not  therefore  a  gratuity.  To  us,  as  a  people,  the 
cost  of  our  products  is  measured  by  the  effort  required  to 
overcome  the  obstacles  nature  presents,  and  not  the  money- 
price.  In  the  long  run,  no  prosperity  can  be  built  up  on 
the  unrequited  toil  of  others. 

To  establish  the  first  two  propositions,  I  quote  at  length 
some  paragraphs  from  Frederic  Bastiat's  chapter  on  Com- 
petition.    I  trust  the  reader  will  patiently  go  over  them  : 

"  The  gift  of  God  "  (say  in  our  fertile  fields)  "  has  be- 
come common— and  the  reader  will  observe  that  I  avail 
myseK  here  of  a  special  fact  to  elucidate  a  phenom- 
enon which  is  universal — this  gift,  I  say,  has  become 
common  to  all.  This  is  not  declamation,  but  the  ex- 
pression of  a  truth  which  is  demonstrable.  Why  has 
this  beautiful  phenomenon  been  misunderstood  ?  Be- 
cause community "  (commonness)  "  is  realized  under  the 
form  of  value  annihilated,  and  the  mind  with  difficulty 
lays  hold  of  negations.  But  I  ask,  is  it  not  true  that 
when,  in  order  to  obtain  a  certain  quantity  of  sugar  or 
cotton,  I  give  only  one  tenth  of  the  labor  which  I  should 

15 


314:  PROTECTION    VS.   FREE  TRADE. 

find  it  necessary  to  expend  in  producing  the  commodity 
myself,  and  this  because  tlie  BraziKan  sun  performs  the 
other  nine  tenths  of  the  work — is  it  not  true,  I  say,  that 
in  that  case  I  still  exchange  labor  for  labor,  and  really  and 
truly  obtain,  over  and  above  the  Brazilian  labor,  and  into 
the  bargain,  the  co-operation  of  the  climate  of  the  tropics  ? 
Can  I  not  affirm  with  rigorous  exactitude  that  I  have  be- 
come, that  all  men  have  become,  in  the  same  way  as  the 
Indians  and  Americans,  that  is  to  say,  gratuitously,  partici- 
pators in  the  liberality  of  nature,  so  far  as  the  commodities 
in  question  are  concerned  ?  .  .  . 

"  England  possesses  productive  coal-mines.  That  is  no 
doubt  a  great  local  advantage,  more  especially  if  we  sup- 
pose, as  I  shall  do  for  the  sake  of  argument,  that  the  Conti- 
nent possesses  no  coal-mines.  Apart  from  the  considera- 
tion of  exchange,  the  advantage  which  this  gives  to  the 
people  of  England  is,  the  possession  of  fuel  in  greater 
abundance  than  other  nations — fuel  obtained  with  less  la- 
bor, and  at  less  expense  of  useful  time.  As  soon  as  ex- 
change comes  into  operation — keeping  out  of  view  compe- 
tition— the  exclusive  possession  of  these  mines  enables  the 
people  of  England  to  demand  a  considerable  remuneration, 
and  to  set  a  high  price  upon  their  labor.  Not  being  in  a 
situation  to  joerform  this  labor  ourselves,  or  procure  what 
we  want  from  another  quarter,  we  have  no  alternative  but 
to  submit.  English  labor  devoted  to  this  description  of 
work  will  be  well  remunerated  ;  in  other  words,  coal  will 
he  dear "  (that  is,  to  a  Erenchman),  "  and  the  bounty  of 
nature  may  he  considered  as  conferred  on  the  jpeople  of  one 
nation,  and  not  on  mankind  at  large. 

"  But  this  state  of  things  can  not  last,  for  a  great  natural 
and  social  law  is  opposed  to  it — competition.  For  the  very 
reason  that  this  species  of  labor  is  largely  remunerated  in 
England,  it  will  be  in  great  demand  there,  for  men  are 


EXPORTATION   OF  OUR  GRATUITIES.  315 

always  in  quest  of  higli  remuneration.  The  number  of 
miners  will  increase,  both  in  consequence  of  the  sons  of 
miners  devoting  themselves  to  their  fathers'  trade,  and  in 
consequence  of  men  transferring  their  industry  to  mining 
from  other  departments.  They  will  offer  to  work  for  a 
smaller  recompense,  and  their  remuneration,  will  go  on 
diminishing  until  it  reach  tlie  normal  7'ate,  or  the  rate 
generally  given  in  the  country  for  analogous  worlc.  This 
means  that  the  price  of  English  coal  will  fall  in  France  / 
that  a  given  amount  of  French  lahor  will  procure  a 
greater  and  greater  quantity  of  English  coal,  or,  rather, 
of  English  labor  incorporated  and  worked  up  in  coal ;  and, 
finally  (and  this  is  what  I  pray  you  to  remark),  that  the 
gift  which  nature  would  appear  to  have  hestowed  upon 
England  has  in  reality  heen  conferred  on  the  whole  human 
race.  The  coal  of  Newcastle  is  brought  within  the  reach 
of  all  men  gratuitously,  as  far  as  the  mere  material  is  con- 
cerned. This  is  neither  a  paradox  nor  an  exaggeration — 
it  is  brought  within  their  reach  hke  the  water  of  the  brook, 
on  the  single  condition  of  going  to  fetch  it,  or  remunerat- 
ing those  who  undertake  that  labor  for  us.  When  we  pur- 
chase coal,  it  is  not  the  coal  that  we  pay  for,  but  the  labor 
necessary  to  extract  it  and  transport  it.  All  that  we  do  is 
to  give  a  corresponding  amount  of  labor  which  we  have 
worked  up  or  incorporated  in  wine  or  in  silk.  So  true  is 
it,  that  the  liberality  of  nature  has  been  extended  to  France, 
that  the  labor  which  v/e  refund  is  not  greater  than  that 
which  it  would  have  been  necessary  to  undergo  had  the 
deposit  of  coal  been  in  France.  Competition  has  estabhshed 
equality  between  the  two  nations  as  far  as  coal  is  concerned, 
except  as  regards  the  mevitable  and  inconsiderable  differ- 
ence resulting  from  distance  and  carriage. 

"  From  what  has  been  said,  we  may  deduce  the  solution 
of  one  of  the  problems  which  have  been  most  keenly  con- 


316  PROTECTION    VS.   FREE  TRADE. 

troverted,  namely,  tliat  of  free  trade  as  between  nation  and 
nation.  If  it  be  tnie,  as  seems  to  me  incontestable,  that 
comj^etltion  leads  the  various  countries  of  the  globe  to  ex- 
change with  one  another  nothing  else  than  labor,  exertion 
more  and  more  equalized,  and  to  transfer  at  the  same  time 
reciprocally,  and  into  the  bargain,  the  natural  advantages 
that  each  possesses,  how  blind  and  absurd  must  those  men 
be  who  exclude  foreign  products  by  legislative  measures, 
under  the  pretext  that  they  are  cheap,  and  have  little  value 
in  proportion  to  their  aggregate  utility ;  that  is  to  say,  pre- 
cisely because  they  include  a  large  proportion  of  gratuitous 
utility ! 

"  In  fact,  were  it  possible  for  an  individual,  a  family, 
a  class,  a  nation,  possessed  of  certain  natural  advantages, 
of  an  important  discovery  in  manufactures,  or  of  the  in- 
struments of  production  in  the  shape  of  accumulated  capi- 
tal, to  be  set  permanently  free  from  the  law  of  competition, 
it  is  evident  that  this  individual,  this  family,  this  nation, 
would  have  forever  the  monojyoly  of  an  exceptionally  high 
remuneration,  at  the  expense  of  mankind  at  large. 

"  Seeing  that  the  advantages  which  appear  at  first  to  be 
the  property  of  certain  individuals,  become,  by  an  admira- 
ble law  of  divine  beneficence,  the  common  patrimony  of 
all ;  seeing  that  the  natural  advantages  of  situation,  of  fer- 
tihty,  of  temperature,  of  mineral  riches,  and  even  of  manu- 
facturing aptitude,  slip  in  a  short  time  from  the  hands  of 
producers,  by  reason  of  their  competition  with  each  other, 
and  turn  exclusively  to  the  profit  of  consumers,  it  follows 
that  there  is  no  country  which  is  not  interested  in  the  ad- 
vancement and  prosperity  of  all  other  countries.  Every 
step  of  progress  made  in  the  East  is  wealth  in  ]3rospective 
for  the  West.  Fuel  discovered  in  the  South  warms  the 
men  of  the  North.  Great  Britain  makes  progress  in  her 
spinning-mills ;  but  her  capitalists  do  not  alone  reap  the 


EXPORTATION  OF  OUR  GRATUITIES.  317 

jyrojit,  for  the  interest  of  money  does  not  rise  /  72oy  do  her 
operatives^  for  the  wages  of  lahor  remain  the  same.  •  In  the 
long  run,  it  is  the  Russian,  the  Frenchman,  the  Spaniard ; 
in  a  word,  it  is  the  human  race,  who  obtain  equal  satisfac- 
tions at  a  less  expense  of  labor,  or,  what  comes  to  the  same 
thing,  superior  satisfactions  with  equal  labor." 

This  exposition  rests  upon  the  undeniable  economic  re- 
sults of  competition.  Bastiat's  logic,  in  this  paragraph,  is 
unimpeachable — his  rhetoric  is  sound  and  the  consequences 
he  traces  are  inexorable.  The  American  farmers  are  asked 
to  work  upon  a  competition  among  themselves  so  intense 
as  to  compel  them  to  export  all  their  gratuities. 

I  have  said  that  a  commodity  which  was  cheap  solely 
by  reason  of  ill-requited  labor  put  into  it  was  not  a  gratu- 
ity. We  have  now  left  the  region  of  natural  agents  or 
tools,  and  have  reached  the  human  being. 

It  is  easy  enough  to  justify  the  attemj)t  by  one  nation 
to  appropriate  the  natural  advantage  of  situation,  of  fertil- 
ity, of  temperature,  of  mineral  riches,  and  of  manufactur- 
ing aptitude  in  another.  These  may  be  made  to  slip  out 
of  the  hands  of  their  possessors  by  their  competition  with 
each  other.  The  gains  thus  achieved  are  real  and  advan- 
tageous. It  is  giving  something  for  something.  The  value 
of  the  trade  depends  on  the  relative  situation  of  the  parties 
to  it.  But  one  nation  could  not  long  successfully  grow 
rich  at  the  cost  of  the  prosperity  of  another — no  more  than 
an  individual.  A  country  in  which  labor  was  oppressed 
and  inadequately  rewarded,  could  not  justly  be  said  to  be 
in  a  state  of  advancement  and  prosperity.  Labor  in  such  a 
country  is  in  a  state  of  quasi-bankruptcy.  It  possesses  no 
essential  purchasing  power.  Unless  it  is  in  possession  of 
one  of  the  commercial  advantages  just  referred  to,  it  can 
have  nothing  to  offer  to  us  which  possesses  any  gratuitous 
element — at  least  nothing  upon  which  a  great  people,  who 


318  PROTECTION    VS.  FREE  TRADE. 

can  give  tliat  same  laboi"  employment  as  part  of  themselves, 
could  afford  to  rely  upon  as  a  permanent  source  of  supply. 
"  Cheapness "  is  a  fetich  which  will  cheat  its  worshipers. 
It  has  no  more  efficacy  than  the  encumber  which  the 
Congo  African  caiTies  about  with  him  as  his  god.  It  is 
idle  to  offer  a  man  an  article  at  a  low  price  if  he  has  noth- 
ing to  buy  it  with.  To  a  purchaser  with  the  means  of 
pajTnent  in  his  hands,  price  is  of  little  account.  A  con- 
sumer in  this  attitude  is  strong.  The  producer  can  not 
continue,  as  such,  to  deal  with  a  consumer,  on  terms  of 
bankruptcy,  whether  he  offers  commodities  or  labor  for 
sale. 

I  read  in  Prof.  Sumner's  tai'iff  commission  address 
these  words :  "  If  there  is  anything  cheap  anywhere,  the 
protectionists  spring  into  activity  to  keep  the  American 
people  from  getting  it.  If  there  is  an  abundance  of  food, 
clothing,  furniture,  and  other  supplies  wliich  is  offered  to 
the  American  people  on  easy  terms,  the  protectionists  call 
it  an  inundation  and  run  to  set  a  barrier  against  it.  A  few 
weeks  ago  I  saw  a  hundi'ed  women  waiting  for  hours  on 
the  sidewalk  for  the  opening  of  a  store  at  which  some  fire- 
damaged  goods  were  to  be  sold  cheap.  A  protectionist 
must  hold  that  these  women  were  insane,  or  that  they  were 
selfishly  ruining  the  country." 

A  protectionist  would  undoubtedly  say  that  any  politi- 
cal economist  who  recommended  the  people  of  any  city  or 
nation  to  depend,  habitually  and  on  system,  for  the  supply 
of  the  commodities  they  need,  "on  some  fire-damaged 
goods  which  were  to  be  sold  cheap,"  was  in  an  acute  stage 
of  insanity,  and  that  such  a  case  could  never  become 
chronic,  for  the  patient  must  either  get  well  or  die  iii- 
daoiter. 

To  await  the  prosperity  which  may  come  from  this 
source  is  to  await  the  bargains  which  come  from  bank- 


EXPORTATION  OF  OUR  GRATUITIES.  319 

rnptcy  and  commercial  disaster.  The  American  workmen 
stand  here  idle  to  wring  gratuities  from  laborers,  pauper- 
ized, brutalized,  bankrupt  in  industrial,  social,  and  domestic 
resources!  A  man  or  a  nation  which  did  either — wait  on 
bankruptcy  or  lire-damaged  goods — with  productive  forces 
in  its  own  hands,  would  reap  the  punishment  inflicted  by- 
outraged  nature,  by  witnessing  the  disappearance  of  all 
producers  as  well  as  of  all  products  in  market.  There  can 
be  no  ordination  of  justiise  in  heaven  or  on  earth  which  can 
make  such  a  scheme  operate  to  confer  a  gi'atuity  on  us.  It 
is  a  scheme  of  commerce  based  on  bankruptcy,  financially, 
industrially,  and  morally,  whose  fruits,  if  such  it  had,  we 
could  not  appropriate.  Moral  law  and  economic  law  alike 
remand  us  to  our  o-svn  fields  of  labor,  imder  our  own  natural 
conditions  of  sacrifice  and  abstinence.  The  God  of  nations 
has  put  it  in  the  power  of  the  people  of  the  United  States 
to  redeem  the  promises  we  have  held  out  to  all  the  world, 
to  come  here  and  participate  in  the  labor  and  remuneration 
which  America  offers.  We  can  ameliorate  the  laborer's  life 
if  he  lives  here — our  resources  will  not  hold  out  if  we  un- 
dertake to  distribute  them,  through  the  machinery  of  foreign 
commerce,  to  all  the  non-resident  population  of  the  earth. 

What  confers  value  is  the  removal  of  obstacles.  The 
labor  of  removing  the  obstacle  is  what  constitutes  cost. 
The  expense  to  the  people  of  the  United  States,  as  a  whole, 
is  the  food  eaten  and  clothing  worn  out  in  the  process  of 
production.  The  better  clothes  and  more  food  put  into 
the  laborer's  consumption  is  not  to  be  regarded  as  the  more 
fuel  put  into  a  worse  machine  or  a  machine  working  under 
disadvantages.  It  is  not  cutting  with  a  duller  axe.  It  is 
using  a  higher-priced  human  instrument,  capable  of  the 
sensation  of  happiness  and  a  sharer  in  the  actual  entity 
which  we  call  "  the  general  welfare."  ^ 

*  "  We  are  thus  led  to  notice  an  ambiguity  that  is  latent  in  our  ordinary 


320  PROTECTION  VS.   FREE  TRADE. 

This  is  attained  distinctly,  as  an  end,  by  having  the 
laborer  here,  and  is  attained  directly  by  employing  him 
here  on  work  which  otherwise  would  not  be  done  here. 
The  sum  of  the  happiness  of  the  human  family  is  increased, 
but  the  increase  is  mainly  enjoyed  by  the  American  laborer. 
We  can  not  cheat  Providence  by  the  trick  of  employing 
the  starving  laborer  abroad — appropriating  his  labor,  and 
then  sit  down,  do  nothing  ourselves,  and  call  it  a  gra- 
tuity. The  gratuity  belongs  to  those  who  are  on  the 
ground,  in  possession  of  the  natural  advantages  which 
Providence  has  conferred  on  us,  on  condition  of  their  use 

vague  estimates  of  the  productive  efficiency  of  human  beings ;  it  is  not  quite 
clear  whether  we  are  to  measure  it  by  the  total  value  of  the  commodities 
produced,  or  by  the  excess  of  this  value  over  the  value  of  what  is  necessarily 
consumed.  The  latter  measurement  is  suggested  by  the  analogy  of  the  in- 
struments, especially  the  living  instruments  employed  by  the  laborers,  since 
in  measuring  the  productiveness  of  useful  animals  we  should  always  consider 
not  their  gross  produce,  but  their  net  produce  after  subtracting  the  value  of 
the  food,  etc.,  consumed  by  them.  The  analogy  is  too  obvious  and  irresistible 
to  be  ignored ;  and  we  must  admit  this  measurement  of  the  productive  effi- 
ciency of  laborers  as  valid  for  some  purposes:  for  instance,  any  employer 
who  undertook  to  feed  his  laborers  would  rightly  use  this  measurement  in 
reckonings  of  his  private  business.  But,  for  the  reason  given  incidentally 
in  the  preceding  chapter,  it  is  not,  I  conceive,  the  measurement  normally 
applicable  in  our  present  consideration  of  the  matter  from  the  point  of  view 
of  the  community ;  so  far,  that  is,  as  the  additional  consumption  which 
causes  the  additional  efficiency  is  held  to  be  desirable,  in  itself,  or  in  its  use 
of  bodily  or  mental  vigor,  as  an  amelioration  of  the  laborer's  life,  and,  there- 
fore, an  element  of  the  ultimate  end  to  which  the  whole  process  of  production 
is  a  means." — H.  Sidgwick,  "Principles  of  Political  Economy,"  p.  144. 

Says  M.  Wolowski :  "  The  abstract  deductions  of  pure  science  do  not 
leave  us  without  disquietude,  since  they  treat  man  much  more  like  a  material 
than  like  a  moral  force.  Under  the  vigorous  procedure  of  speculation,  man 
becomes  a  constant  quantity  for  all  times  and  all  countries,  whereas  he  is  in 
reality  a  variable  quantity.  Man  is  something  different  from  the  sum  of  the 
services  he  may  be  made  to  render,  and  from  the  sum  of  enjoyments  which 
may  be  procured  for  him.  We  must  not  run  the  risk  of  lowering  him  to  the 
level  of  a  living  tool ;  and  from  the  moment  that  we  are  required  to  take  his 
moral  destiny  into  account,  what  becomes  of  abstract  calculation  ?  " 


EXPORT ATION  OF   OUR   GRATUITIES.  321 

in  productive  toil,  and  does  not  consist  in  the  power  to 
extort  exchange  value  from  unrequited  toil  and  sorrow. 
If  we  are  to  divide  with  other  people,  it  ought  to  be,  as  it 
must  be,  on  condition  of  their  coming  here  and  casting  in 
their  contribution  to  the  common  glory  and  happiness  of 
the  citizens  of  the  nation,  by  helping  to  swell  the  annual 
product,  the  national  income — for  the  economist  and  states- 
man measure  success  by  that  income. 

There  need  be  no  doubt  that,  in  virtue  of  the  operation 
of  competition,  as  put  by  Bastiat,  if  we  enter  into  it  by 
way  of  the  world's  commerce,  we  could  be  made  to  ex- 
change the  products  of  our  labor,  and  throw  the  gratuities 
which  nature  has  conferred  on  us  "  into  the  bargain." 

In  the  first  place,  free  trade  recommends  that  we  all 
enter  into  land  industries.  Our  entire  population  is  then 
in  competition,  one  with  another,  in  the  production  of 
exportables.  When  we  go  to  our  markets  we  find  we  en- 
counter the  strong  competition  of  all  the  world  which  is 
self-feeding,  excepting  only  England  and  small  tracts  of 
AVestern  Europe.  We  have  drained  Europe  of  its  artisans 
and  located  them  upon  our  lands,  with  the  twofold  result, 
first,  of  lessening  the  competition  abroad  of  workmen  in 
the  manufacturing  industries  there,  and  diminishing  the 
supply  in  the  market  of  the  goods  which  we  buy;  and 
second,  heightening  the  competition  of  laborers  in  agricult- 
ure here,  and  reducing  the  demand  for  its  products  which 
we  must  sell.  This  may  be  a  beneficent  work.  It  may 
help  "  the  constant  approximation  of  all  men  toward  a  level 
which  is  always  rising,"  but  we  must  descend  to  reach  it. 
The  w^ealth  of  nations  may  be  increased,  but  it  is  at  our 
expense. 

Accordingly,  with  strict  scientific  precision,  Prof. 
Caimes  says  that  while  the  steam-engine,  the  spinning- 
jenny,  and  the  mule  cheapen  manufactures,  "  the  superior 


322  PROTECTION    VS.  FREE  TRADE. 

agricultural  resources  of  foreign  countries,  made  available 
tlirough  free  trade,  keep  down  the  price  of  our  agricultural 
products " ;  and  Prof.  Bonamy  Price,  speaking  of  our 
prairie  farms,  observes,  "  I  call  these  emphatically  English 
fields,  because  political  economy  knows  nothing  about  po- 
litical divisions."  Free  trade  enables  an  Englishman  to 
say  that.  Americans  wish  to  know  how  it  affects  the 
"  political  division  "  we  call  the  United  States.  lie  adds : 
"  Pohtical  economy  asks  no  questions  about  the  oi-igin  of 
the  bread  which  it  finds  on  English  tables.  The  Australian 
and  American  com  are  as  much  English  corn  as  that  grown 
in  Lincolnshire  or  Sussex.  Of  these  superlatively  rich  lands, 
■many  2M7/  no  rent,  and  the  reason  presents  itself  at  once. 
The  cost  of  carriage  eats  up  tfiat  part  of  the  produce  which 
could  generate  rentP  The  American  farmer  may  well  ask 
some  questions  about  this,  and  inquire  whether  the  bread 
on  Englisli  tables  originates  solely  in  his  labor  and  toil,  and 
whether  he  has  exported  his  superlatively  rich  lands  with 
it  as  a  gratuity  into  the  bargain.  Herein,  also,  distinctly 
appears  the  truth  of  Mr.  Carey's  maxim  that  "  whoever  is 
compelled  to  seek  a  market  must  pay  the  cost  of  getting  to 
that  market."  Does  anybody  suppose  that  Englishmen 
preach  free  trade  for  the  purj)ose  of  enhancing  the  price 
of  American  food — England,  whose  population  has  outrun 
its  native  food  capacity  \  If  American  food  is  to  be  cheap- 
ened, let  us  feed  it  to  American  workmen. 

The  free-trader  professedly  puts  the  American  farmer 
in  competition  with  the  farmers  of  Europe,  Asia,  and  Africa, 
and  confidently  counts  upon  our  underselling  them  in  a 
very  limited  market  Luckily  for  hun  and  his  case,  the 
cost,  or  rather  impossibility,  of  transportation  from  some  of 
the  rich  and  undeveloped  food-centers  of  those  countries 
has  disguised  his  weakness.  The  Slavs  of  Russia  and  the 
Ryots  of  India  now  loom  up  with  threatening  import. 


EXPORTATION  OF  OUR  GRATUITIES.  323 

"  Pauper  labor "  seems  about  to  try  its  hand  in  competi- 
tion with  the  American  agriculturist.  Free  trade  must,  as 
it  is  intended  to,  tend  to  put  an  equality  of  price  on  all  the 
labor  employed  in  the  raising  of  portable  food  over  the 
entire  portion  of  the  earth  which  lies  in  the  area  of  cheap 
and  close  commercial  intercourse.  It  may  turn  out  that  the 
ill-timed  sneer  of  the  representative  of  the  "Iowa  State  Free- 
Trade  League,"  who  addressed  the  tariff  commission,  that 
"the  American  farmer  used  more  wheat  in  seeding  his 
lands  than  all  the  protected  industries  furnished  consump- 
tion for,"  may  result  in  a  different  fonn  of  irony. 

Any  merchant's  clerk  who  had  never  ventured  across 
the  threshold  of  a  free-trade  professor's  lecture-room  could 
tell  where  this  kind  of  trading  must  end.  He  could  in- 
stinctively point  out  two  considerations  which  would  for- 
bid the  extension  of  a  series  of  such  exchanges. 


CHAPTER  XY. 

GENEKAL   THEOKT  OF  WAGES — HIGH   KATE  OF  WAGES    IN   THE 
UNITED    STATES. 

As  yet,  political  economy  has  failed  to  furnish  any 
answer  to  the  question,  why  the  remuneration  of  industry, 
as  a  whole,  is  such  as  we  find  it  to  be  in  the  various  coun- 
tries of  the  earth ;  why  the  "  rate  of  wages "  or  "  value 
of  labor"  and  the  "rate  of  profit"  or  "value  of  absti- 
nence "  are  such  as  they  are  in  different  nations. 

If  the  labor  and  capital  which  enter  into  the  produc- 
tion of  a  given  commodity  are  in  effective  competition, 
about  all  we  can  answer  is,  that  the  wages  of  the  laborer 
will  be  determined  by  the  competition  of  the  laborers  con- 
tending for  employment  in  it,  and  the  profit  on  capital  by 
the  competition  of  capital  seeking  that  industry.  That  is, 
we  can  thus  get  partially  at  the  relative  remuneration  of 
the  laborers  among  themselves  and  of  the  capitalists  among 
themselves.  We  know  of  no  principle  on  which  the  share 
of  labor,  as  a  whole,  and  of  capital,  as  a  whole,  can  be  de- 
termined. It  does  not  yet  appear  that  "wages  are  the 
leavings  of  profits."  ^ 

>  A  tentative  formula  as  to  the  result  of  the  competition  between  capital 
and  labor  is  the  one  suggested  by  Ricardo,  Prof.  Senior,  and  others,  and  may 
be  thus  stated :  "  In  proportion  to  the  increase  of  capital  the  absolute  share  of 
the  total  product  falling  to  the  capitalist  is  augmented,  and  his  relative  share 
is  diminished ;  while,  on  the  contrary,  the  laborer's  share  is  increased  both 
absolutely  and  relatively."     That  is,  in  other  words,  the  rate  of  interest  is  de- 


GENERAL   THEORY   OF   WAGES.  325 

There  is  no  single  fonnula  which  can  settle  the  ex- 
change relations  of  commodities,  and,  at  the  same  time,  the 
exchange  relations  of  labor  and  the  exchange  relation  of 
abstinence  or  profits.  They  are  incommensurable  with 
each  other.  "Some  such  aim,"  sajs  Prof.  Cairnes,  "seems 
to  have  guided  the  speculations  of  Bastiat,  whose  work  on 
the  "Harmonies  of  PoHtical  Economy"  is,  in  effect,  an 
essay  toward  the  determination  of  the  required  formula ; 
but  the  result  of  Bastiat's  attempt  is  not  encouraging  to 
those  who  would  essay  the  same  path.  He  produces,  in- 
deed, generalizations  which  seem  to  satisfy  the  needed  con- 
ditions, but,  closely  examined,  they  either  collapse  into  iden- 
tical propositions,  or  are  found  to  contain  some  flagrant 
jpetilio  jprincipii. 

The  economist  treats  the  dealer  while  offering  his  com- 
modity in  terms  of  value,  as  expressed  in  price,  and  the 
laborer,  while  offering  his  services  in  terms  of  value,  as 
expressed  in  wages,  as  if  the  commodity  and  the  laborer 
were  equally  created  in  view  of  an  industrial  "  demand," 
and  they  were  simply  the  "  supply "  to  answer  it.  It  is 
assumed  that  the  forces— labor  and  capital — are  operative 
under  the  same  conditions  of  impersonality,  and  that  each 
only  exists  for  the  sake  of  exchange.  "And  yet,"  says 
Prof.  Francis  A.  Walker,  "there  is  complaint  that  states- 
men and  the  mass  of  the  people  entertain  such  slight  re- 
gard for  political  economy,  whose  professors,  in  the  inter- 
est of  the  purity  and  simpHcity  of  their  science,  discard 
from  the  premises  of  their  reasoning  all  the  '  sympathies, 
apathies,  and  antipathies'  of  mankind,  and  insist  upon 
treating  a  Manchester  spinner,  with  a  wife  and  six  children 
— ^ignorant,  fearful,  and  poor,  in  debt  to  his  landlord  and 
grocer — as  possessing  the  same  mobility,  economically,  and 

creasing,  the  rate  of  wages  is  increasing.    But  the  formula  seems  to  leave  out 
of  consideration  the  increasing  number  of  laborers  who  compete. 


326  PROTECTION    VS.   FREE  TRADE. 

under  the  same  subjection  to  tlie  impulses  of  pecuniary 
interest,  as  a  bale  of  Mancliester  cottons  on  the  wharf,  free 
to  go  to  India  or  to  Iceland  as  the  difference  of  a  penny  in 
the  price  may  determine." 

Adam  Smith's  contribution  to  the  discussion  was  the 
terms  "supply  and  demand."  This  is,  in  truth,  nothing 
but  a  statement  of  the  "  conditions  "  of  the  problem,  and 
furnishes  no  law  for  its  solution.  Mr.  Mill  is  supposed  to 
have  demonstrated  the  inadequacy  of  that  formula.  His 
own  doctrine  has  been  successfully  challenged  by  Mr. 
Thornton  and  Prof.  Cairnes,  who  agree  that  the  doctrine  of 
the  equality  of  supply  and  demand,  as  the  condition  of 
market  prices,  becomes  a  mere  identical  proposition. 

This  is  manifestly  a  method  of  generalizing  names  in- 
stead of  things.  "  Kothing  is  easier,"  is  the  criticism  cf 
Prof.  Cairnes,  "  than  to  say  that  the  value  of  labor,  like  the 
value  of  other  things,  depends  upon  supply  and  demand. 
'We  may  find  the  formula  in  any  newspaper  we  take  up, 
but  what  light  does  that  throw  on  the  causes  which  govern 
the  values  either  of  labor  or  commodities  ?  Simply  none 
at  all,  or  next  to  none  at  alh  What  we  want  to  know  is, 
not  whether  an  increase  of  supply  will  cheapen  a  commodi- 
ty or  will  cheapen  labor,  and  an  increase  of  demand  raise 
the  price  of  each.  Every  costermouger  will  tell  you  this, 
but  what  is  it  that  governs  supply  and  demand  in  each  case  ? 
Now,  we  can  not  take  a  step  toward  dealing  with  this  ques- 
tion without  being  brought  face  to  face  with  the  fact  that 
the  motives  which  influence  human  beings  in  the  production 
and  supply  of  commodities  are  not  those  which  influence 
them  in  the  production  and  supply  of  labor;  in  other 
words,  that  the  conditions  operative  in  the  two  cases  are 
distinct.^ 

'  The  futility  of  treating  laborers  and  commodities  as  equally  objects  of 
sale  in  the  market  inheres  in  the  nature  of  things,  and  I  adopt  Prof.  Cairnes's 


GENERAL  TnEORY  OF  WAGES.  327 

Tlie  discussion  is  an  illustration  of  tlie  vice  of  attrib- 
uting reality  to  the  economists'  abstraction — the  abortive- 
ness  of  contemplating  a  society  of  human  beings  in  its 
simple  aspect  as  an  arena  for  "  buying  and  selHng."  And 
so  political  economy  fails  to  reach  any  solution  of  the 
"  burning   question "  of  wages.     We  turn,  then,  to   the 

language  in  showing  why  it  must  be  so.  "  The  production  of  '  commodi- 
ties '  is  an  onerous  act,  which  will  only  be  undertaken  in  the  prospect  of 
reward,  whence  it  follows  that  the  supply  of  commodities  will  only  be  secured 
on  the  condition  of  this  prospect  presenting  itself.  On  the  other  hand,  the 
production  of  labor  which,  in  other  words,  is  the  production  of  human  be- 
ings, is  not  an  onerous  act,  but  a  consequence  of  complying  with  one  of  the 
strongest  instincts  of  humanity — an  instinct  which,  so  far  from  needing  the 
stimulus  of  reward,  can  only  be  kept  in  due  control  by  powerful  restraints. 
The  cost  in  the  production  of  a  commodity  is  undergone  deliberately,  and 
with  a  distinct  view  to  industrial  ends.  In  the  preparation  of  human  beings 
for  a  career  in  life,  I  will  not  say  that  industrial  ends  have  no  place  at  all  in 
the  calculation,  but  I  will  assert  this,  that  except  in  the  case  of  professional 
or  technical  education — a  mere  bagatelle  in  the  general  expense  of  rearing  a 
laborer — industrial  considerations  are  entirely  subordinate  to  considerations 
of  a  wider  and  altogether  different  character.  ...  A  man,  whatever  be  his 
rank  of  life,  brings  up  his  children — I  speak  of  the  common  case — as  far  as 
he  is  able,  according  to  the  ideas  prevailing  in  that  rank  of  life.  He  does  so 
mainly  because  he  feels  certain  obligations  of  morality  and  affection  toward 
them,  and  because  it  would  be  shameful  to  do  otherwise.  His  children  once 
arrived  at  maturity,  no  doubt  his  views  and  theirs  will  take  a  direction  more 
distinctly  governed  by  industrial  consideration,  or  at  least  consideration  bear- 
ing on  success  in  life ;  but  at  this  point  the  supply  of  labor  has  been  already 
determined.  It  is  now  in  existence,  and  the  industrial  motive,  now  that  it 
comes  into  play,  operates  not  upon  the  aggregate  supply  of  labor,  but  merely 
upon  the  mode  of  its  distribution.  The  adaptation  of  the  supply  of  commodi- 
ties to  the  demand  is  determined  by  strictly  commercial  motives ;  the  adap- 
tation of  the  supply  of  labor  to  the  demand  is  not  so  determined.  Human 
beings,  at  least  out  of  slave  countries,  are  not  produced  to  meet  the  require- 
ments of  the  market.  Now,  this  being  so — the  conditions  determining  the 
phenomena  in  the  two  cases  being  essentially  different — what  can  come  of 
forcing  the  solution,  by  dint  of  verbal  refinements,  into  a  single  formula  ? 
Simply  this  :  either  our  theory  will  be  flagrantly  untrue,  or  it  will  not  go  more 
than  word-deep,  and  our  show  of  explanation  will  merely  seem  to  obscure  the 
essential  facts  of  the  problem." 


328  PROTECTION  VS.   FREE  TRADE. 

mechanism  of  production  in  America  for  the  reasons  of 
the  iiigh  rate  of  wages  and  the  high  rate  of  profits  which 
have  rewarded  our  exertions  here  in  the  United  States. 

Here  we  shall  find  a  consensus,  among  free-trade  writ- 
ers, that  the  productiveness  of  our  labor,  and  consequently 
the  high  rate  of  wages  here,  come  from  agriculture.  And 
on  this  is  based  the  logical  sequence  that  we  ought  all  to 
take  to  that  pursuit,  at  least  until  it  breaks  down.  In  fact, 
it  has  broken  down  already. 

"  The  endless  opportunities  of  agriculture  in  this  land 
are  the  steady  force  that  lifts  our  wages  and  keeps  them  to 
their  actual  height.  Cheap  and  fertile  farms,  to  be  had 
almost  for  the  asking,  are  open  to  all  laborers  and  all  immi- 
grants ;  .  •  .  and  this,  on  the  one  hand,  reduces  the  supply 
of  laborers  in  the  mills  and  factories,  and  on  the  other 
keeps  up  the  rates  of  wages  there  to  a  point  marked  by  the 
average  success  of  labor  in  agriculture."  (Prof.  Perry, 
"  Political  Economy,"  p.  498.) 

"  No  one  will  be  willing  to  turn  away  from  the  indus- 
tries for  which  the  country  offers  the  best  advantages,  to 
take  up  those  in  which  other  countries  have  the  best  ad- 
vantage, unless  the  difference  can  be  made  up  to  him  in 
some  way.  Hence,  manufacturing  industry  here  has  al- 
ways had  to  contend  with  the  profits  possible  in  agricult- 
ural pursuits.  Wages,  so  fa,r  as  any  wages-class  has  ever 
yet  been  developed  here,  must  be  high  enough  to  give  the 
same  scale  of  comfort  as  can  be  won  in  using  land.  The 
high  wages  and  general  high  average  of  comfort  are,  there- 
fore, plainly  the  same  thing,  and  both  proceed  together  out 
of  the  2iQ,iu2\  physical  circumstances  of  the  people."  (Prof. 
Sumner,  "  Princeton  Review  "  essay.) 

"  No  wonder  the  protectionists  arc  enraged  at  the  econ- 
omists who  are  still  stupidly  teaching  that  we  can  produce 
nothing  except  by  applying  labor  and  capital  to  land.  .  .  . 


GENERAL   THEORY   OF   WAGES.  329 

"  In  a  new  country  in  wliicli  there  is  an  immense 
amount  of  unoccupied  land,  and  in  wliicli  the  amount  of 
capital  required  for  tilling  the  soil  is  small,  any  man  who 
has  a  pair  of  stout  hands,  although  he  has  no  skill  and  very 
little  capita],  may  become  a  land-owner  and  agriculturist. 
.  .  .  Every  man  of  the  unskilled  labor  class,  therefore,  has 
an  alternative  offered  to  him.  .  .  .  He  owns  a  thing  (his 
labor)  for  which  there  is  a  high  demand  in  the  market. 
T/ie  comfort  he  could  win  on  the  land  tixes  a  minimum 
below  which  wages  can  not  fall.  If  they  do  temporarily 
fall  below  that  minimum,  the  laborers  take  to  the  land,  as 
they  did  in  the  hard  times  a  few  years  ago.  .  .  . 

"  In  the  second  place,  all  the  protected  industries  of 
this  country  are  now  parasites  on  the  naturally  strong  in- 
dustries. Agriculture  now  supports  itself,  and  all  the  rest 
and  their  losses  ;  therefore,  even  if  it  were  true  that  all  the 
population  would,  under  free  trade,  take  to  agriculture,  it 
is  mathematically  certain  that  agriculture  could  support 
them  all  better  than  under  the  present  arrangements." 
(Prof.  Sumner,  Tariff  Commission  address.) 

Prof.  Walker,  in  a  very  neat  piece  of  analytic  work, 
under  the  head  of  "  The  Competition  of  the  Farm  with 
the  Shop "  ("  Political  Economy,"  edition  1885,  p.  39G), 
has  shown  how,  by  virtue  of  the  protective  statute,  labor- 
ers in  the  protected  industries,  as  well  as  carpenters, 
blacksmiths,  and  masons,  domestic  servants,  physicians, 
lawyers,  and  schoolmasters,  may  be  let  into  "a  partici- 
pation in  the  abundance  enjoyed  by  the  agricultural 
population,"  as  he  chooses  to  express  it.  And  he  concludes 
thus: 

"  But  while  the  law  may  thus  create  high  rates  of  wages 
in  factory  industries,  it  does  not  and  can  not  create  the 
wealth  out  of  which  that  excess  of  manufacturinof  wages 
over  those  of  older  countries  is  paid.     That  wealth  is  ere- 


330  rROTECTION  VS.   FREE  TRADE. 

ated  hy  the  labor  and  capital  emjyloyed  in  the  cidtivation 

of  the  soil.^''  ^ 

•  "  The  Competition  of  the  Farm  with  the  Shop. — It  has  been  the  com- 
petition of  the  fai'm  witli  the  shop  which  has  from  the  first  most  effectually 
retarded  the  growth  of  manufactures  in  the  United  States.  A  population  which 
is  privileged  to  live  upon  a  virgin  soil,  cultivating  only  the  choicest  fields, 
and  cropping  these  through  a  succession  of  years  without  returning  anj'thing 
to  the  land,  can  live  in  plenty,  if  not  fare  sumptuously,  every  day.  .  .  .  Now, 
the  mode  of  living  on  the  part  of  the  agricultural  population  has  necessarily 
set  a  minimum  standard  of  wages  for  mechanical  labor.  With  an  abundance 
of  cheap  land,  with  a  population  facile  to  the  last  degree  in  making  change 
of  avocation  and  residence,  very  few  native-born  Americans,  and  compara- 
tively few  immigrants,  are  likely  to  be  drawn  into  factories  and  shops  ou 
terms  which  imply  a  meaner  subsistence  than  that  secured  in  the  cultivation 
of  the  soil. 

"  The  Hand-Trades. — There  are  certain  classes  of  mechanical  pursuits, 
however,  which  by  their  nature  secure  to  those  who  follow  them  a  minimum 
remuneration  fully  up  to  the  standard  of  the  agricultural  wages  of  the  region. 
Such,  for  instance,  are  the  trades  of  the  carpenter,  blacksmith,  and  mason, 
in  which  the  work  is  of  a  kind  which  can  only  be  done  upon  the  spot.  The 
house  can  not  be  built  abroad  and  imported  for  the  farmer's  use  ;  the  wagon 
must  be  mended  near  the  place  where  it  broke  down ;  the  horse  must  be 
shod,  the  tools  sharpened,  by  the  artisans  of  the  neighborhood.  If,  then,  the 
farmer  will  have  such  services  performed,  he  must  admit  those  who  perform 
them  to  share  of  his  own  abundance.  .  .  . 

"  Personal  and  Professional  Services. — But,  again,  there  are  certain 
classes  of  services  of  a  personal  or  professional  nature  which  have  also  se- 
cured for  those  rendering  them  a  participation  in  the  abundance  enjoyed  by 
the  tillers  of  the  soil  in  the  same  region.  The  remuneration  received  by  the 
members  of  these  classes,  whether  called  the  wages  of  domestic  servants,  or 
the  fees  of  physicians  and  lawyers,  or  the  salaries  of  schoolmasters  and 
clergymen,  or  the  profits  of  retail  trade,  has  been  out  of  all  relation  to  the 
remuneration  of  similar  services  in  other  countries,  and  has  amounted  to 
just  what  I  have  termed  it — a  participation  in  the  abundance  enjoyed  by  the 
agricultural  population.  Since  these  services  could  only  be  performed  njjon 
the  spot,  the  agriculturists  have  been  obliged,  if  they  would  have  the  serv- 
ices rendered,  to  pay  for  them  out  of  the  large  surplus  of  their  own  prod- 
uctc.  .  .  . 

"  The  Factory  Industries. — But,  now,  we  note  that  there  arc  still  other 
important  classes  of  service  to  be  rendered,  respecting  which  the  rules 
change.     The  remuneration  of  the  persons  rendering  these  services  no  longer 


GENERAL  THEORY  OF  WAGES.  331 

It  is  evident  tliat  the  artisans  who  make  all  that  portion 
of  tlie  "  sundry  articles  "  which  we  are  "  comiyelled "  to 

has  reference  to  the  abundance  of  agricultural  production  in  the  several  sec- 
tions of  the  United  States,  is  no  longer  irrespective  of  the  remuneration  of 
such  similar  classes  elsewhere.  These  persons  are  not,  necessarily,  admitted 
to  a  participation  in  the  fruits  of  American  agriculture. 

*'  The  services  referred  to  are  such  as  can  be  performed  wilhoul  respect  to 
the  location  of  the  consumer  of  the  product.  They  are  nearly  identical  with 
what  we  call,  in  the  technical  sense  of  the  term,  manufactures. 

"  Whenever  an  American  farmer  wants  a  pane  of  glass  set,  or  a  pair  of 
boots  mended,  or  a  horse  shod,  he  must  pay  some  one  of  his  neighbors 
enough  for  doing  the  job  to  keep  him  in  his  trade,  and  to  keep  him  out  of 
agriculture,  in  the  face  of  the  great  advantages  of  tilling  the  soil  in  New 
York,  or  Ohio,  or  Dakota,  or  wherever  else  the  farmer  in  question  may  live ; 
but  how  much  he  shall  pay  the  man  who  makes  the  pane  of  glass,  or  the 
pair  of  boots,  or  the  set  of  horseshoes,  will  depend  upon  the  advantages  of 
tilling  the  soil,  not  where  he  himself  lives,  but  where  the  maker  of  horseshoes, 
of  boots,  or  of  glass,  may  live. 

"  If  he  will  have  the  work  done,  he  must  pay  some  one  somewhere  enough 
to  keep  him  in  his  trade  and  out  of  agriculture,  but  not  necessarily  out  of 
New  York  agriculture,  or  Ohio  agriculture,  or  Dakota  agriculture  ;  but,  per- 
haps, out  of  English  agriculture,  or  French  agriculture,  or  Norwegian  agri- 
culture, such  as  that  may  be,  with  the  advantages  no  less  and  no  more  there 
enjoyed  by  the  cultivators  of  the  soil  under  the  requirement  of  constant  fer- 
tilization, deep  plowing,  and  thorough  drainage,  and  subject  to  that  stringent 
necessity  which  economists  express  by  the  term,  'the  law  of  diminishing 
returns.'  .  .  . 

"  Now,  to  offset  and  overcome  the  inducements  to  engage  in  agriculture, 
even  in  merry  England,  is  a  different  thing  from  keeping  a  man  in  his  trade 
and  out  of  agriculture  in  the  United  States.  .  .  . 

"  The  American  agriculturist,  having  large  quantities  of  grain  and  meat,  of 
cotton  and  tobacco,  left  on  his  hands,  after  providing  ample  subsistence  for 
his  family,  and  even  after  hiring  the  carpenter,  mason,  and  blacksmith,  the 
schoolmaster,  lawyer,  and  doctor,  for  as  much  time  as  he  requires  their  re- 
spective services,  and  still  further,  after  putting  a  good  deal  into  farm-imple- 
ments and  increase  of  stock,  is  desirous  of  obtaining  with  the  remainder 
sundry  articles  more  or  less  necessary  to  health,  comfort,  and  decency.  To 
him,  consulting  his  personal  interests,  which  is  all  the  average  man  can  be 
expected  to  do  in  a  bargain,  it  makes  no  difference  whether  the  articles  he 
requires  are  made  on  one  side  of  the  Atlantic  or  on  the  other  ;  but  it  makes 
a  great  difference  to  him  what  he  is  obliged  to  pay  for  them  ;  how  much  of 


332  PROTECTION  VS.   FREE  TRADE. 

have  made  on  tliis  side  of  the  Atlantic  are  entitled  to  par- 
ticipate in  the  abundance  enjoyed  by  the  agricultural  popu- 
lation, 5y  the  ordinance  of  nature,  and  not  hy  the  ordinance 
of  the  statute. 

his  surplus  grain  and  meat,  tobacco  and  cotton,  must  go  to  secure  a  certain 
definite  satisfaction  of  liis  urgent  and  oft-recurring  wants.  If  he  must  needs 
pay  some  one  to  stay  out  of  American  agriculture  and  do  this  work,  his  sur- 
plus will  not  go  so  far  as  if  he  were  allowed  to  pay  some  one  to  stay  out  of 
English  agriculture  to  do  it. 

"  What  the  State  can  do. — But  here  the  state  enters  and  declares  that 
it  is  socially  or  politically  necessary  that  these  articles,  these  nails,  these 
horseshoes,  this  cotton  or  woolen  cloth,  or  what  not,  shall  he  made  on  this 
side  of  the  Atlantic,  and  not  on  the  other.  That  necessity  the  agriculturist,  as 
consumer,  can  not  be  expected  to  feel :  he  does  not  ceire  where  the  things  were 
made  ;  he  only  wants  them  to  use.  He  does  not  care  who  makes  them  ;  he 
does  not  even  care  whether  they  arc  made  at  all ;  they  would  answer  his  pur- 
pose just  as  well  were  they  the  gratuitous  gifts  of  nature,  spontaneous  fruits 
of  the  soil,  or  the  sea,  or  the  sky.  Whatever  his  own  economical  theories 
may  be,  he  will,  as  purchaser,  every  time  select  the  cheapest  article  which 
will  precisely  answer  his  need.  He  will  not,  of  his  own  motion,  pay  more 
for  an  article  because  it  is  made  on  his  side  of  the  Atlantic  than  he  could  get 
an  equally  good  article  for,  bearing  the  brand  of  Sheffield,  or  Birminghanu 
or  Manchester.  But  if  the  state  says  Ac  mif^t,  he  must ;  and  consequently  the 
American  maker  of  this  article  is,  hj  force  of  law,  admitted  to  a  participa- 
tion in  the  abundance  enjoyed  by  the  American  agricultural  class.  The  tiller 
of  the  soil  is  now  compelled,  by  the  ordiitance  of  the  state,  to  share  his  bread 
and  meat  with  the  maker  of  nails  or  of  horseshoes,  of  cotton  or  of  woolen 
cloth,  just  as  he  was  before  compelled,  by  the  ordinance  of  nature,  to  share 
his  bread  and  meat  with  the  blacksmith,  carpenter,  and  mason,  the  school- 
master, lawyer,  and  doctor. 

"  It  is  perfectly  true,  therefore,  as  the  protectionist  asserts,  that  a  tariff  of 
customs  duties  upon  foreign  goods  imported  into  new  countries  tends  to  create 
and  maintain  high  rates  of  wages  in  the  factory  industries.  But  iox  protective 
duties,  those  articles  which,  in  their  nature,  can  be  readily  and  cheaply  trans- 
ported, will  be  produced  predominantly  in  countries  where  the  minimum  stand- 
ard of  mechanical  wages  is  set  by  agricultural  conditions  far  less  favorable 
than  those  which  obtain  in  the  United  States,  in  Canada,  or  Australia. 

"  But  while  the  law  thus  can  and  does  create  high  rates  of  wages  in  factory 
industries,  it  does  not  and  it  can  not  create  the  wealth  out  of  which  that  ex- 
cess of  manufacturing  wages,  over  those  of  older  countries,  is  paid.  That 
wealth  is  created  by  the  labor  and  capital  employed  in  the  cultivation  of  the  soiV 


GENERAL   THEORY   OF   WAGES.  333 

We  liave  seen  that  this  will  include  the  producers  of 
about  uine  tenths  of  the  "  sundry  articles  ''  made  in  what 
is  called  the  "  protected  industries." 

The  extracts  selected  contain  the  argument  in  its  full 
force,  and  the  free-trade  economist  is  entitled  to  the  just 
force  of  them.  They,  nevertheless,  do  not  contain  the 
truth  of  the  matter.  They  do  not  give  a  true  analysis  of 
the  mechanism  of  the  society,  as  a  whole.  They  proceed 
on  fallacious  assumptions  which  it  is  possible  to  trace  up 
and  expose. 

First,  then,  it  is  not  true  that  "  we  can  produce  noth- 
ing except  by  applying  labor  and  capital  to  land." 

This  was  the  doctrine  of  the  Physiocrates  of  France,  and 
is  now  exj^loded.^ 

'  Their  doctrine  was  this :  All  national  wealth  is  derived  from  the  soil ; 
agriculture  is  the  only  productive  occupation ;  the  production  of  raw  material 
is  the  only  calling  in  which  the  value  of  the  product  exceeds  the  cost  of  pro- 
duction. The  labor  of  the  farmer  produces  not  only  enough  to  support  him 
while  engaged  in  the  labor,  but  a  surplus  over  and  above  this,  which  may  be 
called  the  net  product.  This  net  product  generally  falls  to  the  landlord  un- 
der the  form  of  rent,  and  is  the  fund  from  which  all  expenditures  of  a  public 
nature  must  be  defrayed.  The  landlords,  since  they  live  without  labor,  are 
called  the  classe  disponiblc,  and  they  may  devote  themselves  to  the  service  of 
the  public.  Manufacturers  and  artisans  are  unproductive.  They  add  value,  it 
is  true,  to  the  raw  material  which  they  work  over,  but  only  as  much  as  is 
equivalent  to  the  cost  of  their  support  while  engaged  in  their  work.  If  they 
are  able  to  save  anything  from  their  income,  they  do  it  either  by  limiting 
their  consumption  within  too  narrow  bounds,  or  by  some  favoritism  of  gov- 
ernment, or  of  chance,  which  secures  them  against  competition.  Although 
unproductive,  these  classes  are  by  no  means  useless,  since  by  their  labor  they 
give  permanence  to  the  utility  embodied  in  raw  material,  and  by  their  im- 
provements they  lessen  the  cost  at  which  the  agricultural  classes  can  supply 
themselves  with  the  needed  manufactures,  and  so,  by  diminishing  the  cost  of 
living  of  the  farmers,  they  render  possible  the  increase  of  the  grcund-rent, 
tliat  is,  of  the  "net  national  revenue."  The  system  was  refuted  by  Adam 
Smith,  with  partial  success  ("Wealth  of  Nations,"  IV,  chap,  ix,  sec.  2S),  and 
since  by  John  Stuart  Mill  completely.  Of  course,  the  materials  of  all  indus- 
tries, in  one  sense,  come  from  the  earth.     Any  increase  of  value  conferred 


33i  PROTECTION  VS.   FREE  TRADE. 

Second.  "  All  the  protected  industries  of  this  country 
are  now  parasites  on  tlie  naturally  strong  industries." 

This  is  a  glsiring petitio princqni.  Agricultural  indus- 
tries here  or  ekewhere  are  "naturally  strong"  in  the  sense 
that  using  natural  instruments  of  production  they  yield, 
large  returns  in  kind,  for  labor  expended.  AVhat  the  econ- 
omist wants  to  know  is,  Are  they  strong  in  the  sense  that 
these  large  returns  have  a  high  exchange  value?  To 
assume,  as  he  does,  that  ours  would  exchange  in  the  mar- 
kets of  the  world  at  the  same  rates  that  they  do  now  under 
a  system  of  free  foreign  trade,  with  a  vastly  larger  supply, 
is  to  settle  in  advance  the  very  question  of  fact,  which  is 
the  essence  of  the  controversy. 

Third.  "Agriculture  now  supports  itself  and  all  the 
rest,  and  all  their  losses." 

If  this  simply  means  that  agriculture  supplies  its  want 
of  food  to  the  people,  furnishes  the  means  of  subsistence^  it 
is  true.  If  it  means  that  the  exchange  values  of  the  prod- 
ucts of  the  manufacturing  industries  which  supply  our 
other  wants — the  means  of  existence — are  conferred  at  the 
expense  of  agriculture,  it  is  not  true.  By  the  census  of 
1880  the  value  of  the  products  of  the  manufacturing  indus- 
tries was  $5,369,570,191 ;  of  farm  products,  $2,213,402,504.1 

If  it  is  meant  that  agriculture  (in  case  all  the  popula- 
tion took  to  it)  would  furnish  them  a  living  amount  of 

upon  a  material  thing  by  actual  human  service  is  an  act  of  production,  and 
every  man  who  confers  that  value  is  a  producer ;  and  it  is  further  true,  and 
has  been  so  recognized  since  the  days  of  Adam  Smith,  that  less  value  is  con- 
ferred by  labor  as  such  in  agriculture  than  in  most  other  departments  of  pro- 
duction. 

■  The  capital  employed  in  manufactures,  $2,790,272,006 ;  net  value  given 
to  materials  used,  $2,000,000,000—71  per  cent;  value  of  farms,  $10,197,0'J6,- 
776;  value  of  productions  (revised  estimate),  $3,600,000,000 — 35  per  cent. 
It  may  be  noted  that  the  value  of  the  product  of  English  mauufactures  for 
the  same  year  was  fl,000,000,000. 


GENERAL   THEORY   OF   WAGES.  335 

food,  and  tliiis  support  them,  no  one  is  interested  to  ques- 
tion it.  If  it  means  that,  under  these  circumstances,  agri- 
cukure  would  furnish  all  the  population  with  the  abun- 
dance they  now  have  at  the  same  price,  the  Professor  again 
makes  an  unjustifiable  assumption  of  a  conclusion  for 
which  he  has  furnished  no  premises  in  the  facts,  and  one 
which  the  facts  fatally  negative.  Agriculture  could  fur- 
nish the  same  supply  of  goods  made  abroad,  on  one  set  of 
conditions :  that  the  laborers  abroad  who  make  the  goods, 
and  all  the  workmen  who  make  goods  for  them,  consume 
the  same  quantity  of  American  food,  vegetable  and  animal, 
exportable  and  perishable,  which  the  same  workmen  here 
would  ;  that  the  exports  continue  to  bear  the  same  prices, 
and  that  the  foreigners  pay  the  cost  of  freight  both  ways, 
and  the  commissions,  insurance,  and  profits  of  the  middle- 
men. Why  don't  they  buy  ours  ?  They  have  other  sources 
of  supply. 

Fourth.  We  now  come  to  "  the  competition  of  the  farm 
wdth  the  shop."  ^ 

We  begin  with  the  agriculturist  as  the  sole  occupant 
of  a  virgin  soil,  and  the  abundance  of  food  and  other  neces- 
saries of  life  which  follow  its  cultivation.  The  services  of 
the  carpenter,  blacksmith,  and  mason  are  at  once  necessary 
to  the  satisfaction  of  his  desires,  and  he  employs  them. 
What  he  pays  them  is  not  taxation,  nor  does  he  pay  them 
out  of  his  abundance.  He  simply  finds  himseK  in  the  cate- 
gory of  Aristotle — "  One  man  is  no  man."  His  wants  ex- 
ceed his  powers.  Then  come  the  schoolmaster,  the  doctor, 
and  the  parson.  It  is  physically  possible  that  they  might 
go  on  the  land,  but  not  morally  possible.     If  they  did,  and 

*  The  writer  has  often  wondered  why  Prof.  Francis  A.  Walker  (who  made 
the  clear  analysis  given  above)  seemed  to  close  his  eyes  to  the  consequences 
which  his  analysis  led  up  to ;  or,  rather,  why  he  did  not  carry  it  a  step 
further,  which  would  have  brought  him  into  the  clear  light  of  protection. 


336  PROTECTION  VS.   FREE  TRADE. 

tlie  carpenter,  blaclvsmitli,  and  mason  followed  suit,  tliey 
would  only  have  created  a  duplicate  demand  for  other  car- 
penters, blacksmiths,  and  masons,  and  other  schoolmasters, 
doctors,  and  parsons.  The  process  would  never  end,  and 
we  should  never  reach  an  organism  with  co-ordinated 
structure  and  functions.  And  so  they  simply  surrender  to 
their  humanness  and  make  common  cause,  supplying  their 
wants  in  the  order  of  strict  necessity.  The  necessity  for 
food  happening  to  lie  at  the  bottom,  they  all  share  what- 
ever abundance  their  physical  surroundings  afford.  Which 
shall  satisfy  the  desire  and  necessity  for  food,  and  which 
shall  satisfy  the  desire  and  necessity  for  houses,  and  wells, 
and  education,  and  religious  teaching,  is  a  mere  matter  of 
exj)ediency  in  the  "  division  of  labor."  This  community, 
now,  as  a  whole,  need  alike,  whether  farmer  or  parson, 
"  sundry  articles  "  more  or  less  necessary  to  health,  com- 
fort, and  decency.  Inasmuch  as  agricultural  conditions  in 
foreio-n  countries  set  a  less  favorable  minimuTn  of  comfort 
on  a  farm  there,  the  staiidard  of  mechanical  wages  there  is 
lower,  and  there  men  can  be  found  to  produce  these  "  sun- 
dry articles  "  at  less  wages,  and  they  can  in  consequence  be 
bought  for  less  price.  (This  is  Prof.  "Walker's  argument,  not 
mine.)  The  conclusion  is,  that  our  community  should  buy 
these  "  sundry  articles  "  in  the  foreign  countries.  AVell,  if 
they  could,  there  would  be  no  economic  objection.  Can 
they  ?  The  moment  the  surplus  of  grain  and  meat,  of  cot- 
ton and  tobacco,  which  our  community  produces,  fails  to 
buy  the  whole  supply  of  "  sundry  articles "  which  the 
whole  society  needs,  a  portion  must  be  made  by  themselves. 
This  portion,  now  a  "  necessity,"  must  be  produced  upon  the 
same  conditions  under  which  all  the  other  members  of  the 
society  are  operating.  When  this  portion  becomes  the 
larger  part  of  the  supply,  its  producers  stand  in  the  same 
relation  to  the  farmer  which  the  carjjenter  and  schoolmaster 


GENERAL   THEORY   OF   WAGES.  337 

did — tliey  share  the  abundance,  not  of  the  farmer^  but  of 
the  resources  of  the  society.  The  society  as  a  whole  has  the 
u^e  of  the  land  for  nothing.  They  confer  a  private  title  to 
his  land  upon  the  farmer,  but  that  is  not  in  the  interest  of 
the  farmer,  as  such.  It  is  found  the  most  expedient  way  to 
secure  the  largest  production  from  the  soil,  and  is  a  mere 
form  of  the  division  of  labor.  This  will  be  more  clearly 
seen  if  we  take  an  advantageous  industry  of  some  other 
form — if  the  farmer  produced  oil,  say,  instead  of  wheat. 
Title  to  the  oil-well  might  be  conferred  on  tlie  individual 
producer.  If  the  number  of  producers  was  limited,  he  and 
his  necessary  neighbors  might  buy  abroad  all  the  "  sundry 
articles."  The  moment  their  purchase-money — oil — failed 
for  all  their  supply,  and  home  production  became  a  neces- 
sity for  a  part,  we  at  once  see  the  right  of  the  society,  as  a 
whole,  to  share  the  abundance  of  the  oil  industry  in  work- 
ing for  each  other,  not  the  abundance  of  oil-well  owners. 
The  oil-well  never  was  and  never  can  be  absolutely  private 
property;  it  must,  in  the  nature  of  things,  subserve  the 
public  purpose. 

Or  suppose  the  first  comers  had  found  ready-made 
looms,  limited  ia  number,  and  gave  them  out  in  the  "  di- 
vision of  labor,"  and  in  the  interest  of  the  best  care  and 
highest  production,  to  individual  ownership.  Up  to  a  cer- 
tain point,  the  use  of  the  looms  would  be  the  most  advan- 
tageous industry.  If,  however,  the  product  of  the  looms 
failed  to  buy  in  the  foreign  market  the  food  of  the  whole 
society,  and  the  society  was  driven  to  raise  a  portion  of  the 
food-supply  on  its  own  fields,  it  is  evident  enough  that, 
in  that  event,  it  could  not  be  said  that  the  farmer  shared 
the  abundance  of  the  loom-owner  j  he  simply  shared  the 
abundance  which  belonged  to  the   society  as   a  whole.^ 

'  England  must  buy  half  its  food  and  most  of  its  raw  materials  by  \ycrk- 
ing  its  looms. 

16 


338  PROTECTIOX  VS.    FREE  TRADE. 

These  natural  looms  cost  tlie  society,  as  a  whole,  nothing ; 
and  weaver  and  farmer  are  simply  different  organs  of  one 
body.  It  matters  not  under  what  disadvantage  the  home 
production  of  the  food  is  carried  on,  if  it  is  a  necessary 
part  of  the  whole  supply.  It  could  not,  then,  be  said  that 
the  high  wages  received  by  the  farmer  under  these  circum- 
stances— the  same  wages  the  weaver  got — were  created  by 
the  labor  and  capital  employed  on  the  looms. 

In  the  cases  put,  the  land-owner,  the  oil-producer,  and 
the  loom-proprietor  are  the  owners  of  monopolies.  The 
monopolies  must,  in  the  very  nature  of  the  case,  pass  to 
the  people  at  large.  Their  owners  are  trustees  for  the 
public.^ 

If  we  may  believe  Alexander  Hamilton  on  a  question 
of  fact,  this  was  the  condition  of  things,  historically,  in  the 
United  States  m  1791.  In  his  report  we  find  tliis  remark- 
able testimony : 

"  A  constant  and  increasing  necessity  on  their  part " 
(the  people  of  the  United  States)  "  for  the  commodities  of 

'  "  In  the  first  place,  land  is  a  monopoly,  not  by  the  act  of  man  but  of 
nature ;  it  exists  in  limited  quantity,  not  susceptible  of  increase.  Now,  it  is 
aa  acknowledged  principle  that  when  the  state  permits  a  monopoly,  either 
natural  or  artificial,  to  fall  into  private  hands,  it  retains  the  right,  and  can 
not  divest  itself  of  the  duty,  to  place  the  exercise  of  the  monopoly  under  any 
degree  of  control  which  is  requisite  for  the  public  good.  The  self-interest  of 
the  owners  of  land,  under  perfect  freedom,  coincides  with  the  general  interest 
of  the  community  up  to  a  certain  point,  but  not  wholly  ;  there  are  cases  in 
which  it  draws  in  a  totally  opposite  direction." — John  Stuart  Mill,  "  Fort- 
nightly Review,"  1870,  p.  642. 

Exactly.  When  the  products  of  the  industry  carried  on  by  the  owners  of 
a  monopoly  fail  to  supply,  by  exchanges,  the  wants  of  a  given  community  of 
which  they  are  part,  when  the  industrial  entity  composed  of  the  monopolists 
fails  to  supply  the  wants  of  the  political  entity  on  the  same  arena,  we  have 
reached  the  point  when  the  self-interests  of  the  monopolists  cease  to  coincide 
with  the  general  interests  of  the  community.  Natural  laws  and  human  laws 
alike,  then,  operate  to  compel  the  monopolists  to  share  their  abundance  with 
the  whole  society. 


GENERAL   THEORY   OF   WAGES.  339 

Europe,  and  only  a  partial  and  occasional  demand  for  their 
own  in  return,  coidd  not  but  expose  them  to  a  state  of  im- 
poverisliment  compared  with  the  opulence  to  which  their 
political  and  natural  advantages  authorize  them  to  aspireP 

Whose  opulence  ?  Manifestly  that  of  the  whole  society  ; 
not  that  merely  of  the  land-owners. 

To  the  same  effect  is  the  resolution  of  the  General  As- 
sembly of  Pennsylvania,  cited  in  the  Preface  of  this  book. 

In  other  words,  as  a  matter  of  fact,  more  than  a  hun- 
dred years  ago  we  in  this  country  found  that  a  portion, 
more  or  less,  of  the  "  sundry  articles  "  must  be  made  here, 
on  our  soil,  and  that  it  was  just  as  necessary  that  makers  of 
that  portion  should  be  here,  alongside  of  us,  as  it  was  that 
the  carpenter,  blacksmith  and  mason,  the  schoolmaster,  the 
doctor  and  parson,  should  live  in  our  midst.  The  vice  of 
the  whole  analysis  is,  that  it  assumes  that  the  farmer  would 
have  none  of  them  around  him,  unless  he  was  compelled 
to,  whereas  the  farmer,  as  such^  has  no  more  right  to  have 
his  say  about  it  than  the  hod-carrier.  ISTone  of  the  vast 
number  of  artisans  engaged  in  the  great  production,  of 
which  we  are  all  consumers,  "  participates  in  the  abundance 
enjoyed  by  the  agricultural  population."  They  participate 
in  the  abundance  of  the  society  to  which  they  belong, 
though  each  must  work  for  his  own  share.  Without  the 
one  hundred  and  fifty  classes  of  workmen,  co-operating  in 
our  industrial  system,  the  agricultural  population  woidd 
have  no  aJnindance.  They  might  have  enough  of  mere 
food — so  has  the  Esquimau  and  the  Patagonian.  Every 
workman,  farmer,  oil-producer,  weaver,  artisan,  pastor  or 
pedagogue,  whose  mission  here  is  necessary  to  supply  the 
home  demand,  is  entitled  to  share  in  the  abundance  which 
our  resources,  the  nation's,  make  possible. 

If  we  operated  under  free  trade,  and  supplied  our 
wants  from  surplus  agricultural  products  sold  abroad,  the 


340  PROTECTION  VS.   FKEE  TRADE. 

surplus  would  not  come  out  of  tlie  farmer,  it  would  not  be 
the  abundance,  even,  of  agriculture — it  would  simply  be 
the  form  of  the  surplus  which  our  productive  industry,  as 
a  whole,  realized.  The  power  of  that  surplus  to  satisfy  our 
wants  is  the  very  question  of  fact  to  be  settled.  It  is  the 
same  as  if  we  expended  our  energies  in  producing  gold,  or 
silver,  or  coal ;  we  convert  our  labor  into  that  commodity. 
The  size  of  the  surplus  and  its  salableness  depend  on  the 
wants  of  buyers  abroad  ;  and  the  advantages  to  be  derived 
from  the  exchange  depend  upon  the  further  circumstance, 
whether  their  market  contains  what  we  want.  The  mo- 
ment we  are  comjjelled  to  make  a  part  of  the  same  kind  of 
goods  at  home,  the  abundance  has  failed  us  for  exchange 
jjurposes.  The  home  producers  of  that  part  must  then 
share  this  abundance,  and  as  the  whole  production,  domes- 
tic and  foreign,  must  be  sold  under  like  conditions  of 
price,  the  foreign  product,  be  it  more  or  less,  is  handi- 
capped by  a  duty,  to  bring  the  cost  to  home  prices.  "  But 
this  in  no  way  proves  the  inexpediency  of  the  duties  in 
question,  since  they  may  very  well  give  adequate  encour- 
agement to  native  industry,  without  completely  excluding 
the  foreign  products,  and  it  can  not  be  an  objection  to  them 
from  a  purely  national  point  of  view,  that  a  part  of  their 
effect  is  merely  to  levy  a  tribute  on  foreigners,  for  the  na- 
tional exchequer."     (Sidgwick,  p.  449.) 

So  far  we  have  sold  our  surplus,  it  would  seem,  and 
taken  our  pay  for  it  on  terms  onerous  to  us,  and  getting 
worse.  We  have  had  the  full  advantage  of  our  abundance, 
some  of  which  we  have  shared  with  artisans  abroad.  We 
have  apparently  bought  all  the  surplus  they  had  for  sale. 
Free  trade  would  make  us  share  it  all  with  workmen 
abroad.  This  we  have  seen  conclusively  in  Chapter  XIV. 
This  would  seem  to  be  about  all  there  is  in  this  depai't- 
ment  of  our  inquiry. 


GEXERAL   TDEORY   OF   WAGES.  34 1 

Having  got  rid  of  these  fallacious  views  of  the  correla- 
tion of  the  producers  in  a  society,  let  ns  see  how  tlie  Jiigh 
wages  in  the  United  States  do  arise.^ 

In  America,  wages  of  common  labor  have  always  been 
high ;  not  only  money-wages,  but  the  real  Avages,  reckoned 
in  the  commodities  received.  It  is  generally  assumed  that 
the  minimnm  of  wages  here  was  high,  for  the  reason  that 
the  laborer  was  sure  of  a  certain  amount  of  comfort  if  he 
went  on  the  land ;  and  this  is,  too,  the  Tninimum,  which  it- 
self implies  that  there  is  some  higher  rate.  But  this  would 
be  true  only  in  the  case  he  became  a  land-owner,  the  pro- 
prietor of  a  natural  agent.  In  such  event,  too,  there  was 
always  held  out  to  him  the  rise  in  the  value  of  his  estate 
by  reason  of  the  general  advance  in  society ;  he  would  reap 
in  the  end  the  benefits  of  the  settlement  of  others  around 
and  near  him.  The  labors  of  other  people  expended  on 
roads,  highways,  telegraphs,  would  confer  great  value  upon 
him  arising  out  of  mere  societary  growth.  In  point  of  fact, 
the  increase  of  value  in  agricultural  lands  has  amounted  to 
many  thousand  millions  of  dollars  over  and  above  the  capi- 
tal and  labor  spent  upon  the  land — "  the  unearned  incre- 
ment "  of  Mr.  Mill. 

'  Mr.  David  A.  Wells,  in  addressing  the  Free-Trade  Convention  which 
met  in  Chicago  in  November,  1885,  uses  this  language:  "But  whatever  may- 
have  been  the  case  in  former  days — whether  it  be  true  or  not  that  certain 
branches  of  industry  have  been  more  rapidly  developed  than  they  would 
otherwise  have  been  by  this  method — yet,  now  we  affirm  that  protection  has 
ceased  to  protect.  We  affirm  that  neither  the  profits  nor  the  wages  in  the 
protected  industries  are  any  higher,  if  as  high,  as  they  are  in  the  great  body 
of  our  industries  which  are  absolutely  free  from  the  possibility  of  foreign 
competition." 

No  one  ever  pretended  or  desired  that  protection  could  or  did  raise  the 
wages  or  profits  in  the  protected  industries  above  the  rates  current  in  the 
country.  Labor  and  capital,  in  protected  employments,  simply  shared  in  the 
abundance  of  the  land,  on  the  principle,  to  each  according  to  its  shai-e  in  the 
common  product  of  industry. 


342  PROTECTION  VS.   FREE  TRADE. 

The  wages,  however,  of  the  mere  agricultural  laborer 
have  never  been  the  criterion  of  wages  paid  to  artisans  and 
members  of  the  different  trades.  It  is  tnie  that  everj  man 
coidd  go  upon  the  land  without  capital  so  long  as  the  lands 
were  in  effect  sold  by  the  General  Government  for  a  nomi- 
nal sum,  or  really  given  away  under  the  homestead  acts. 
It  can  scarcely  be  said  that  the  economic  instinct  was  the 
operative  cause  in  these  cases.  Many  reasons  combine  to 
take  people  to  the  land,  Adam  Smith  had  pointed  out 
some  of  them ;  but  they  were  operative  under  widely  dif- 
ferent conditions  from  those  which  swept  so  tremendous  a 
wave  of  immigration  over  our  Western  prairies,  and  which 
lias  now  reached  the  passes  of  the  Rocky  Mountains,  lost 
in  the  returning  wave  from  the  Pacific  coast. 

"  The  beauty  of  the  country,  besides  the  pleasure  of 
country  life,  the  tranquillity  of  mind  which  it  promises, 
and,  wherever  the  influence  of  human  laws  does  not  dis- 
tract it,  the  independence  which  it  really  affords,  are  charms 
that  more  or  less  attract  everybody,  and  in  every  stage  of 
his  existence  man  seems  to  retain  his  predilection  for  this 
primitive  employment."  Again,  he  says :  "  From  artificer 
a  man  becomes  a  planter,  and  neither  large  wages  nor  the 
easy  subsistence  which  the  country  affords  "  (he  is  speaking 
of  the  American  colonies)  "  can  bribe  him  to  rather  work 
for  other  people  than  himself.  He  feels  that  an  artificer  is 
the  seiwant  of  his  customers,  from  whom  he  derives  his 
subsistence;  but  that  a  planter  who  cultivates  his  own 
land,  and  derives  his  necessary  subsistence  from  the  labor 
of  his  own  family,  is  really  a  master,  and  independent  of 
all  the  world." 

But  in  the  very  act  of  indulging  in  these  sentiments, 
he  secures  their  gratification  at  the  loss  of  productive  re- 
turns for  labor  as  such.  As  an  industry  it  is  less  profit- 
able than  mechanical  or  manufacturing  pursuits,  except 


GENERAL  THEORY   OF  WAGES.  343 

under  conditions  never  realized.  lie  has  more  leisure,  ex- 
periences a  sense  of  indeiJendence ;  but  these  are  secured 
at  the  cost  of  pursuing  a  less  remunerative  industry.  He 
enjoys  a  high  sense  of  security  in  the  nature  of  his  pos- 
sessions, and  a  feeling  of  safety  for  tlie  future  of  himself 
and  his  family.  These  induce  him  to  expect  and  accept 
smaller  pecuniary  returns.  This  very  tendency  to  agricult- 
ure may  be  so  disproportionate  as  to  result  in  an  economic 
loss  to  the  community  as  a  whole.  Labor  which  results  in 
an  agricultural  glut  produces  nothing,  or  worse.  England 
itself  has  passed  from  the  condition  of  a  people  unduly  ag- 
ricultural to  one  unduly  mechanical.  We  tried  the  ex]oeri- 
ment,  and  did  not  find  it  profitable  or  enjoyable.  The 
American  farmer  himself  is  also  the  owner  of  American 
railroads,  bank-stocks,  factory-stocks,  and  all  other  fonns  of 
capital. 

The  temperament  which  moves  him,  characterizes,  how- 
ever, a  very  considerable  number  of  men,  and  is  suflicient  to 
drive  a  palpably  undue  proportion  of  our  population  into 
the  "most  advantageous"  industry.  In  an  economical 
point  of  view,  the  differences  in  the  purposes  and  results  of 
the  agriculturists  must  be  distinguished  from  those  of  the 
adventurers  who  seek  the  gold  and  silver  regions.  There 
is,  again,  a  very  important  distinction  between  a  capitalist 
looldng  to  the  most  remunerative  investment  for  his  sav- 
ings and  the  laborer  seeking  a  vocation  which  affords  the 
most  comfort  and  independence  for  himself  and  family. 

In  truth,  we  should  not  need  capitalists,  as  such,  in  the 
United  States.  Until  all  the  lands  were  taken  up,  the 
capitalist  could  not  find  laborers  for  his  operations — the 
laborers  would  be  land-owners.  Only  as  owner  of  the  soil 
could  he  get  the  returns  from  the  soil,  the  cultivation  of 
which  was  the  most  advantageous  industry.  There  has 
always  been  a  nonnal  rate  of  wages  in  the  United  States 


344  PROTECTIOX    vs.  FREE   TRADE. 

nbove  tliat  paid  to  agricultural  labor.  The  liigli  returns 
did  not  come  from  agricultural  labor,  but  from  agricultural 
ownership.  The  draft  in  this  direction  lessened  compe- 
tition, and  prevented  wages  going  do^^^l. 

It  is  a  question  of  some  bearing  on  the  general  discus- 
sion, to  ascertain  precisely  what  it  is  which  has  kept  up  the 
high  rate  of  wages  in  the  United  States,  but  it  can  not  be 
settled  out  of  hand,  as  we  have  seen  it  attempted.  The 
underlying  reason  seems  unquestionably  to  be  found  in  the 
character  and  aims  of  the  men  who  settled  the  colonies, 
under  whose  dignity  of  character,  and  fidelity  to  their  own 
rights  as  citizens  and  freedmen,  their  industries  were 
begun  and  developed.  With  them,  life  had  a  serious  and 
energetic  aspect.  They  possessed  the  high  spirit  and  met- 
tle of  a  race  who  had  the  interests  of  a  remote  future  as 
well  as  the  present  in  view.^  Self-respecting  as  they  were, 
they  could  accept  no  condition  of  hving  which  was  not 
befitting  themselves.  There  might  be  lack  of  means  and 
power  to  gratify  all  the  wants  of  men,  with  their  desires 
and  aspirations,  but  there  was  no  abatement  in  their  stand- 
ards. Their  surromidings  were  primitive,  but  lowly  con- 
ditions of  fife  were  not  incompatible  with  the  purity,  de- 
cency, and  heroism  of  their  lives.  In  the  course  of  his 
eulogy  on  President  Garfield,  Mr.  Blaine  gets  to  the  root 
of  the  matter :  "  The  poverty  of  the  frontier,  where  all 
were  engaged  in  a  common  straggle,  and  where  a  common 
sympathy  and  hearty  co-operation  lighten  the  burdens  of 
each,  is  a  very  different  poverty,  different  in  kind,  differ- 

1  "In  what  way,"  asks  Adam  Smith,  "has  Europe  contributed  to  the 
grandeur  of  the  colonies  of  America  ?  In  one  way,  and  in  one  way  only,  she 
has  contributed  a  great  deal.  Magna  virum  mater.  She  bred  and  formed 
the  men  who  were  capable  of  achieving  such  great  actions,  and  for  laying  the 
foundations  of  so  great  an  empire.  The  colonies  owe  to  Europe  the  educa- 
tion and  great  vieios  of  their  active  and  enterprising  founders,  and  some  of 
the  greatest  and  most  important  of  them  owe  to  her  scarce  anything  else." 


GENERAL  TIIEOKY   OF  WAGES.  345 

ent  in  influence  and  effect,  from  that  conscious  and  humili- 
ating indigence  which  is  every  day  forced  to  contrast  itself 
with  neighboring  wealth  on  which  it  feels  a  grinding  de- 
pendence. The  poverty  of  the  frontier  is,  indeed,  no  pov- 
erty. It  is  but  the  beginning  of  wealth,  and  has  the 
boundless  j)0ssibilities  of  the  future  always  opening  be- 
fore it." 

Energetic  efforts  and  temporary  sacrifice  give  the  hope 
of  permanent  achievement,  of  a  secured  status  as  men  and 
self-respecting  citizens. 

Labor  was  their  religion.  The  circumstances  which 
surrounded  them  enabled  them  to  reap  its  whole  reward. 
Nothing  went  to  the  landlord  for  "  rent,"  nothing  to  the 
capitalist  for  "profits."  In  truth,  they  were  under  eco- 
nomic conditions  which  were  entirely  anomalous.  A  peo- 
ple imbued  with  the  knowledge,  and  practically  reahzing 
the  scope  of  civilization,  were  face  to  face  with  a  continent 
boundless  in  extent  and  resources  to  subjugate  it  to  their 
uses.  In  the  United  States  the  worldn2:-classes  were  not 
compelled  to  carry  their  whole  labor-power  to  market ; 
indeed,  there  were  no  working-classes,  as  commonly  under- 
stood. Wages  were  above  the  height  of  urgent  necessity.  A 
higher  standard  of  hving  was  attained  ;  necessary  wants  of 
the  worlanen  being  easily  satisfied,  their  need  of  decencies 
increased.  And,  above  all,  they  were  under  the  general  stirc. 
ulus  of  a  good  prospect  for  the  future,  by  which  an  honor- 
able artisan  is  distinguished  from  the  proletariat.  They 
were,  moreover,  possessed  of  that  degree  of  intelligence  and 
seK-restraint  which  prevented  an  increase  in  wages  from 
producing  an  ojijjressive  increase  in  the  number  of  chil- 
dren. 

Their  "isolation"  from  European  systems  was  com- 
plete. The  rewards  of  labor  were  distributed  to  them  in 
the  exceptional  manner  that  then'  circumstances  allowed 


346  PROTECTION  VS.   FREE  TRADE. 

— a  division  to  each  according  to  his  labor.  The  rewards 
of  labor  are  distributed  now  to  their  descendants  in  like 
manner,  so  far  as  we  have  been  enabled  to  retain  their  eco- 
nomic condition.  It  is  the  explanation  of  their  and  our 
high  rate  of  wages,  still  maintained  in  the  face  of  the 
greatest  influx  of  laborers  which  the  world  has  ever  seen. 
Prof.  Senior  had  commented  on  the  causes  which  diverted 
the  proceeds  of  labor  from  the  laborer,  and  which  fixed  the 
laborer's  share :  "If  all  the  laborers  were  employed  in  the 
production,  direct  or  indirect,  of  commodities  for  their  own 
use,  the  rate  of  wages  would  depend  solely  on  the  product- 
iveness of  their  labor.  But  it  is  obvious  that  this  could 
never  be  the  case  unless  the  laborers  themselves  were  the 
owners  of  all  the  capital  and  all  the  natural  agents  of  the 
country  ;  a  state  of  existence  so  utterly  barbarous  as  to  be 
■^dthout  distinction  of  ranks  or  division  of  labor."  (It 
must  be  boi'ue  in  mind  that  the  Professor  wrote  as  an  Eng- 
lishman.) "  A  great  portion  of  the  labor  employed  in  a 
civilized  community  is  employed  in  the  production  of 
things  in  the  use  of  which  the  laborer  is  not  to  participate. 
In  a  civilized  community,  therefore,  the  extent  of  the  fund 
for  the  maintenance  of  labor  depends  not  only  on  the  pro- 
ductiveness of  labor,  but  also  on  the  number  of  persons 
employed  in  the  production  of  things  for  the  use  of  labor- 
ers, compared  with  the  whole  number  of  laboring  families. 
...  If  all  workmen  were  employed  in  nothing  but  the 
production  of  articles  consumed  by  workmen,  the  rate  of 
wages  would  be  determined  almost  exclusively  by  the  ratio 
between  the  number  of  the  working  population  and  the 
amount  of  their  products.  The  effect  must  be  much  the 
same  when  the  wealthy  are  exceedingly  frugal  and  employ 
their  savings  as  fully  as  possible  in  the  employment  of 
common  home  labor,  while,  on  the  other  hand,  the  exporta- 
tion of  wheat  and  other  articles  which  the  working- classes 


GEXERAL  TOEORY   OF  WAGES.  347 

consume,  in  exchange  for  diamonds,  lace,  champagne,  di- 
minishes the  demand  for  common  labor  in  a  country."  To 
the  extent,  then,  to  •which  labor  is  employed  in  the  produc- 
tion of  things  which  laborers  use,  will  their  share  of  the 
product  be  large.  There  is  more  for  the  laborers  to  divide ; 
their  wages,  measured  in  the  commodities  produced,  will  be 
larger.  And  labor  in  America  has,  in  the  main,  been  ex- 
pended in  the  production  of  the  very  commodities  which 
the  laborer  consumed.  It  left  large  dividends — high  wages 
— for  them. 

There  is  nothing  in  the  mere  complexity  of  industry  to 
change  the  operation  of  this  principle.  "We  have  liad  occa- 
sion to  urge  that,  by  retaining  the  production  of  the  com- 
modities in  use  to  our  own  labor  in  the  United  States,  we 
provoke  a  double  production  and  a  double  consumption — 
that  there  is  so  much  more  to  divide  among  producers  in 
their  capacity  as  consumers. 

The  power  of  a  people  who  grow  into  a  higher  class  of 
wants  to  enforce  the  means  of  gratifying  them  even  in  an 
old  society,  has  been  illustrated  in  the  rise  of  wages  which 
has  taken  place  in  most  parts  of  Europe  within  the  last 
twenty  years.  Improved  civilization  has  produced  greater 
demands  and  requirements  in  the  class  of  laboring-men ; 
all  authorities  agree  that  they  live,  as  a  whole,  better  than 
they  used  to,  and  they  insist  on  getting  hetter  paid.  This 
is  true  in  England,  Germany,  Belgium,  and  France.  It 
may  be  that  "  where  the  skies  are  brightest,  the  air  most 
genial,  the  work  of  husbandry  pleasantest,  life  in  every 
way  most  agreeable,  the  price  of  farm-labor  is  highest "  ; 
but  that  does  not  account  for  the  hio-her  was-es  of  the  other 
labor-classes  in  all  these  countries. 

There  is  a  general  consensus  of  opinion  among  econo- 
mists as  to  the  causes  of  this  phenomenon.  In  these  causes 
really  lie  the  only  hopeful  outlook  which  we  get  for  the 


348  PROTECTION  VS.   FREE  TRADE. 

race  of  wage-earners.  They  result  from  tlie  access  given 
to  all  the  workmen  of  a  society  to  the  productive  occupa- 
tions. They  do  not  result  from  agricultural  conditions  nor 
the  opportunity  to  enter  upon  agricultural  pursuits.  When 
the  people  of  a  country  co-operate  in  pyroduciion^  much  is 
jproduced,  and,  there  is  much  to  divide.  In  an  article  on 
"  The  Movements  of  Agricultural  Wages  in  Europe,"  in  the 
"Fortnightly  Iteview"  for  June,  18T4r,  will  be  found  a 
careful  statement,  founded  on  official  reports,  of  the  causes 
co-operating  to  make  wages  high ;  not  merely  a  liigh  rate 
of  money-wages,  but  a  high  purchasing  power  in  them. 
Of  Germany  it  is  said :  "  Speaking  generally,  the  south- 
western region,  whose  boundary  has  just  been  roughly 
sketched,  is  the  main  region  of  industrial  and  commercial 
enterprise,  communication  by  steam,  general  activity,  in- 
telligence, and  wealth.  Vicinity  to  the  chief  countries  and 
markets  of  western  EurojJe,  numerous  Hues  of  railway,  a 
river  crowded  with  steamers,  coal,  iron,  and  their  products? 
cause  a  greater  abundance  and  more  rapid  circulation  of 
currency,  a  greater  demand  and  competition  for  labor  of 
all  kinds,  and  a  generally  higher  price  for  agricultural,  as 
well  as  town  or  mechanical  labor,  than  is  to  be  found  in 
the  northeast  of  the  empire,  w^hich  lies  remote  from  the 
traffic,  civihzation,  and  progress  of  the  Western  world,  is 
much  less  completely  provided  with  railways,  and  is  in  a 
more  primitive  condition  as  regards  customs,  ideas,  and 
industrial  life. 

"  In  Belgium,  again,  although  the  principal  cause  (as 
in  every  progressive  country  in  Europe)  of  diversity  in  the 
local  rates  of  agncultural  wages  is  the  presence  or  absence 
of  mines,  manufactures,  or  commerce  on  a  great  scale, 
other  causes  are  at  work. 

"  In  France,  as  in  Gei-many,  the  chief  causes  of  high 
agricultm-al  wages  are — proximity  to  great  industrial  cen- 


GENERAL  THEORY  OF  WAGES.  349 

ters  or  easy  communication  witli  great  markets.  In  Nor- 
mandy the  rate  of  wages  is  as  two  to  one  compared  with 
the  rate  throngliout  a  great  part  of  Brittany,  and  there 
are  several  reasons  for  the  difference  :  Normandy  is  much 
nearer  to  the  market  and  Paris ;  it  has  great  manufacturing 
towns,  and  Brittany  none. 

"  Thus  there  are  yai-ious  causes  in  each  country  for 
great  diversities  of  agricultural  wages,  but  the  most  power- 
ful and  the  most  general  cause  is  the  unequal  distribution 
of  advantages  for  manufactures  and  commerce  and  of  good 
markets.  The  currency  of  all  Europe  has  been  vastly  aug- 
mented by  new  mines  and  instruments  of  credit ;  the  rapid- 
ity, also,  of  the  circulation  of  money  has  multiplied,  and 
the  prices  of  all  things,  labor  included,  which  have  not  in- 
creased in  i^roportion,  have  by  consequence  risen.  Second- 
ly, money  has  increased  most,  and  the  price  of  labor  has 
risen  most,  in  the  districts  whose  money-getting  powers 
have  increased  most  through  industrial  development  and 
rapid  communication  with  the  best  markets. 

"  Tlu'rdly,  our  Continental  neighbors  have  acquired  in 
recent  years  those  new  avenues  of  industry  and  commerce, 
iron,  coal,  the  steam-engine,  steam  locomotion,  which  Eng- 
land possessed  a  generation  earlier;  prices,  consequently, 
have  risen  in  many  parts  of  the  Continent  to  the  English 
scale  from  a  much  lower  line." 

The  writer  of  this  essay.  Prof.  Leslie,  summarizes  tlie 
results  as  follows :  "  Capital,  money  and  its  representatives, 
and  the  demand  for  labor,  have  increased  most  where  the 
means  of  production  and  the  means  of  communication  with 
the  best  markets  have  improved  most;  where  coal,  iron, 
and  mechanical  power  have  multiphed  the  product  of  the 
human  hand,  and  where  railways  and  other  modes  of  com- 
munication have  made  rapidest  progress.  Broad  exempli- 
fications of  the  influence  of  these  two  sets  of  conditions 


350  PROTECTION  VS.   FREE  TRADE. 

(wliicli  are  closely  related  to  superior  natural  advantages 
and  the  means  of  development)  are  to  be  seen  on  every 
side  at  Lome  and  abroad." 

The  American  farmer  has  never  had  any  market  so 
good  for  himself  as  the  home  market.  Kow,  when  rail- 
ways have  put  him  in  communication  with  all  parts  of  it, 
the  free-trader  asks  him  to  abandon  it  for  the  imposing, 
wide-sounding  "  world's  market."  The  condition  of  things 
digested  in  the  abstract,  as  here  quoted,  is  a  demonstra- 
tion from  the  facts  of  actual  experience  of  the  power  of 
society  association,  which  Mr.  Carey  indicated  as  the  cen- 
tral fact  in  the  progress  of  civilization,  the  divinely  ap- 
pointed lever  with  which  man  moves  the  universe.  The 
rate  of  wages  in  America  has  no  real  relation  to  the  amount 
of  comfort  which  a  man  gets  by  working  the  soil.  The 
early  settler  in  the  country  was  a  man  with  his  wants 
awakened,  wants  not  only  of  food  and  clothing  and  shelter, 
which  political  economy  conceives  him  as  mainly  striving 
to  supply,  but  wants  of  his  moral,  political,  and  industrial 
nature.  "  The  whole  boundless  continent "  was  for  his 
appropriation  to  uses  which  would  not  contract  his  j)owers. 
There  were  inducements  to  all  the  industries  open  to 
human  skill  and  persistence.  His  labor  could  be  profitably 
emj^loyed  upon  the  soil ;  it  would  not  be  unprofitable  to 
employ  it  upon  coal  and  iron  and  textile  fabrics.  The 
whole  tone  of  things  generally  about  him  was  energetic. 
He  would  not,  it  is  true,  starve  upon  the  land,  but  the 
steam-engine  and  the  locomotive  would  add  a  thousandfold 
to  the  efficiency  of  any  labor  he  could  combine  with  them ; 
the  mountain-streams  would  leap  with  a  song  to  turn  his 
wheels.  It  had  not  occurred  to  him  to  wait  until  the  higher 
wages  of  labor  in  Europe  had  made  agriculture  in  America 
less  profitable,  and  that  he  was  so  well  off  that  he  could 
not  afford  to  use  the  bounties  which  lay  at  his  feet.     The 


GENERAL  THEORY   OF  WAGES.  35 1 

rate  of  wages  in  America  was  higher  than  the  minimuin 
which  the  alternative  of  taking  to  the  land  afforded,  be- 
cause the  American  was  the  kind  of  man  he  was,  and  he- 
cause  the  physical  conditions  of  things  were  such  as  they 
were.  He  could  satisfy  all  the  wants  of  his  nature  by  the 
application  of  his  energies  to  the  materials  about  himself — 
fields,  mines,  forests,  treasures  in  earth  and  air  and  water — 
at  a  less  cost  of  effort  than  the  inhabitant  of  any  other 
country  in  the  world.  It  comported  with  his  tastes,  his 
ainjs,  his  aspirations,  his  safety,  and  his  independence  to 
produce  them  directly.  With  his  farm,  and  with  his  own 
workshop  in  co-operation,  he  could  make  the  greatest  an- 
nual product  of  his  industry,  and  sound  political  economy 
justified  his  methods.  And  that  is  the  way  in  which  wages 
came  to  be  high,  and  these  the  reasons  why  they  continue 
to  be  high. 

"  A  permanently  high  rate  of  wages,  both  as  cause  and 
effect,  is  very  intimately  connected  with  a  flourishing  con- 
dition of  national  life.  It  proves,  on  the  one  hand,  gi'cat 
productiveness  of  the  public  economy  of  the  people  gen- 
erally, prudence,  self-respect,  and  control,  even  of  the 
lowest  classes ;  virtues  which,  however,  are  found,  on  the 
whole,  only  where  jjolitical  liberty  exists,  and  where  the 
lowest  classes  are  rightly  valued  by  the  higher.  On  the 
other  hand,  it  produces  a  condition  of  the  great  majority 
of  that  portion  of  the  population  who  have  to  support 
themselves  on  the  wages  they  receive,  worthy  of  human 
beings,  a  condition  in  which  they  can  educate  their  chil- 
dren, enjoy  the  present,  and  provide  for  the  future." 
(Prof.  Roscher.) 

Only  the  free  man  cares  for  the  future.  The  distribu- 
tion of  the  aggi'egate  wages  earned  by  American  labor  did 
not  depend  on  differences  in  their  social  positions.  Politi- 
cal institutions  made  them  equals.     American  society  early 


352  PROTECTION  VS.   FREE  TRADE. 

became  definitely  industrial.  No  social  discredit  attached 
to  labor  as  such.  Since  the  close  of  the  rebellion  in  1865 
it  seems  certain  that  no  such  exhibition  of  devotion  to  use- 
ful labor  of  hand  and  brain  has  ever  been  seen  in  the  whole 
history  of  the  race  as  has  been  offered  by  the  citizens  of  a 
restored  country  competing  with  each  other  for  the  f raits 
of  a  high  civilization.  It  has  been  the  policy  of  this  coun- 
try to  have  free  trade  in  laborers,  although  just  at  present 
the  immigration  of  laborers  from  China  is  restricted.  Prof. 
Perry  remarks,  "If  China  should  j^recipitate  itseK  upon 
the  United  States,  or  India  upon  England,  as  the  mere 
economical  impulse  might  indicate,  it  would  be  disastrous 
to  the  Western  nations."  The  disaster  would  consist  in  the 
economic  and  social  degradation  of  labor,  denoted  by  the 
low  standard  of  living  which  the  Mongolian  adopts.  The 
competition  of  "  cheap  Chinese  labor "  menaces  the  Eng- 
lish race  in  America  and  Australia  in  only  one  respect, 
the  smaller  necessary  consumption  of  the  Chinese  as  com- 
pared with  the  Englishman.  The  latter  makes  a  smaller 
total  net  produce  of  a  day's  labor  because  his  consumption 
l^y  so  much  more  exceeds  that  of  the  former,  whose  gross 
earnings  are  much  less.  The  American  or  English  work- 
man considers  himself  a  man  and  not  a  mere  tool.  The 
same  general  protest  takes  effect  against  the  cheap  laborer, 
as  well  as  the  cheap  labor,  of  any  other  people,  if  it  be 
manifested  in  a  lowered  standard  of  life.  In  America, 
witness  the  uprising  against  the  squalid  Hungarian  now 
seen  in  the  anthracite  coal  regions  of  Pennsylvania.  "We 
can  not  insist,  too  frequently  and  too  urgently,  on  the 
necessity  of  maintaining  a  high  rate  of  wages  in  the  United 
States. 

Whether  men  or  society,  as  a  whole,  have  any  real  con- 
trol over  the  distribution  of  the  joint  produce  of  land, 
capital,  and  labor,  is  the  one  valuable  problem  of  political 


GENERAL   THEORY   OF  WAGES.  S53 

economy.  In  the  United  States,  so  far,  the  facts  are  that 
an  equitable  relation  has  been  established  and  maintained 
between  rent,  interest,  and  wages.  So  far  as  this  relation 
has  been  realized,  it  gives  satisfaction  to  every  right-minded 
man.  This  feeling  of  satisfaction  is  one  of  the  principal 
conditions  precedent  to  the  highest  prosperity  of  produc- 
tion, inasmuch  as  upon  it  depends  the  partici])ation  of  all 
owners  of  funds,  lands,  and  forces. 

Every  deviation  from  this  relation  or  proportion  is  a 
misfortune,  but  never  so  great  as  wlien  it  takes  place  at 
the  expense  of  the  wages  of  labor.  "  It  should  never  be 
forgotten,"  says  Prof.  Roscher,  "  that  rent  is  an  appropria- 
tion of  the  gifts  of  nature,  and  that  interest  is  a  further 
fruit  obtained  by  frugahty  from  older  labor  already  re- 
munerated. Besides,  the  rate  of  wages,  when  high  gen- 
erally, adds  to  the  efficiency  of  labor,  which  can  not  be 
claimed  for  interest  or  rent.  The  best  means  to  preserve 
the  harmony  of  the  three  branches  of  income  is,  however, 
universal  activity.  .  .  .  Rich  or  poor,  strong  or  weak,  the 
idler  is  the  knave." 

From  whatever  point  of  view  we  approach  the  indus- 
trial organism,  it  is  seen  that  every  new  thing  which  is 
added  to  the  national  income  comes  from  labor,  which  is 
repaid  by  wages.  The  best  distribution  of  the  national 
income  will  result  from  that  condition  of  things  which  en- 
ables them  to  produce  real  goods  in  an  increasing  quantity 
and  variety.  ISTeither  rent,  interest,  nor  wages,  as  such,  are 
any  addition  to  a  nation's  income.  The  only  true  increment 
possible  is  the  neio  things,  new  commodities,  which  her 
workmen  can  be  induced  to  make  and  add  to  the  inventory 
of  her  national  possessions. 

The  high  rate  of  wages,  then,  is  the  product  of  sev- 
eral forces.  A  principal  one  is  the  varied  standard  of 
living  which  has  become  a  national  habit.     If  the  power 


354  PROTECTION    VS.   FREE   TRxVDE. 

to  live  up  to  that  standard  resides  entirely  in  the  returns 
which  the  laborer  may  get  from  going  upon  the  land,  it 
introduces  a  disquieting  conception  of  society,  and  one 
which  must  be  looked  into  in  the  further  discussion.  What 
we  have  been  calling  "  wages  "  is,  then,  in  essence,  seen  to 
be  "rent."  It  accrues  to  the  landowner  as  such.  The 
consequences  and  the  responsibilities  attaching  thus  to  the 
owner  of  a  natural  instrument  of  production  become  more 
and  more  serious  as  we  approach  the  time,  now  nearly 
reached  in  the  United  States,  when  all  the  laud  has  been 
appropriated  and  has  passed  into  private  ownership.  The 
option,  then,  of  going  upon  the  land  will  have  ceased,  and 
the  laborer  must  be  something  of  a  capitalist,  more  or  less, 
before  he  can  buy  lands,  which  now  will  stand  him  in  con- 
siderable of  an  investment.  It  is  manifest  that  the  high 
returns  to  labor,  as  such,  expended  on  the  soil,  depend  on 
several  conditions :  First,  that  the  laborer  on  the  land  is 
the  owner  of  the  land ;  second,  that  his  wages,  measured 
in  the  products  which  he  raises,  are  subject  to  the  law  of 
diminishing  returns ;  third,  so  long  as  he  can  not  retard 
the  operation  of  that  law,  his  returns  i?i  kind  will  continue 
less — that  is,  the  bushels  of  wheat  or  com,  the  bales  of 
cotton,  or  the  pounds  of  tobacco  per  acre  as  a  return  for 
a  day's  work  ;  but,  fourth,  the  exchange  value  of  his  crops, 
as  measured  by  the  quantity  of  foreign  products  which  he 
can  buy  with  them,  is  subject  to  conditions  imposed  on 
him  by  facts  in  foreign  markets  over  which  he  has  no  con- 
trol, and  which  are  incapable  of  prevision  by  any  laws  of 
the  game  of  "  catalectics."  And  the  facts  in  the  foreign 
market  are  of  three  descriptions — whether  there  is  a  de- 
mand for  all  his  surplus,  the  market  value  of  that  surplus, 
and  whether  it  offers  him  a  full  supply  in  return. 

The  proposition,  then,  that  the  high  rate  of  wages  has 
grown  out  of  the  refuge  which  the  laborer  has  heretofore 


GENERAL  THEORY  OF  WAGES.  355 

had  in  taking  to  the  knd,  leads  us  to  rather  startHng  pros- 
pects. Adam  Smith  had  said  :  "  The  cheapness  and  plenty 
of  good  land  encourage  im2:)rovement  and  enable  the  y^/'o- 
^r'letor  to  pay  these  high  wages.  In  those  wages  consist 
almost  the  whole  price  of  the  land,  and,  though  they  are 
high  considered  as  the  wages  of  labor^  they  are  low  con- 
sidered as  the  price  of  what  is  so  very  valuable^ 

As  between  us  and  the  rest  of  the  world,  our  advan- 
tages consist  in  something  in  the  nature  of  rent.  "  Whole 
countries  may,  because  of  their  great  natural  advantages, 
possess — so  far  as  the  commerce  of  the  entire  world  is  con- 
cerned— something  analogous  to  rent:  thus,  for  instance, 
North  America,  although  there  that  world-rent  finds  ex- 
pression in  the  natural  height  of  the  wages  of  labor  and 
rate  of  interest."  That  is,  the  apparent  wages  of  agricul- 
tural labor  is  made  up  partly  of  rent. 

In  connection  with  the  accepted  fact  that  most  articles 
of  consumption  which  the  laboring-man  makes  by  the  aid 
of  machinery  (and  Mill  thinks  machinery  has  not  relieved 
the  working-man  of  an  hour's  labor)  have  been  cheapened 
some  hundreds  and  some  thousands  of  fold  in  the  last  cent- 
ury, and  that  the  price  of  food  has  not  decreased  at  all, 
the  following  observations  by  Prof.  Cairnes  do  not  bear 
an  optimistic  import.  They  are  somewhat  suggestive  of 
"  Progress  and  Poverty."  They  hint  at  some  further  anal- 
ysis of  the  relations  of  men  and  things  in  the  social  state, 
some  such  analysis  as  Mr.  Gladstone  has  been  compelled  to 
essay  in  the  recent  Irish  land  acts : 

"  The  productiveness  of  industry  only  affects  the  rate 
of  wages  and  profits  in  so  far  as  it  results  in  a  cheapening 
of  the  commodities  which  enter  into  the  consumption  of  the 
laborer. 

"  Not,  indeed,  that  the  introduction  of  improved  pro- 
cesses into  agriculture  has  been  for  naught ;  it  has  resulted 


356  PROTECTION  VS.   FREE  TRADE. 

in  a  large  augmentation  of  the  aggregate  returns  obtained 
from  the  soil,  but  witliout  permanently  lowering  its  price, 
and  therefore  without  permanent  advantage  to  either  cap- 
italist, or  laborer,  or  to  other  consumers.  The  large  addi- 
tion to  the  wealth  of  the  country  has  been  neither  to  prof- 
its nor  to  wages,  nor  yet  to  the  public  at  large,  but  to  swell 
a  fund  ever  growing,  even  while  its  proprietors  sleep — t/ie 
rent-roll  of  the  owners  of  the  soil.  Accordingly,  we  find 
that,  notwithstanding  the  best  progress  of  agricultural  in- 
dustry effected  within  a  century,  there  is  scarcely  an  im- 
portant agricultm-al  product  that  is  not  as  dear  now  as  it 
was  a  hundred  years  ago ;  as  dear,  not  merely  in  money- 
price,  but  in  real  cost.  The  aggregate  return  from  the 
land  has  immensely  increased,  but  the  cost  of  the  costliest 
portion  of  the  product,  which  is  that  which  determines  the 
whole,  remains  pretty  nearly  as  it  was." 

If  the  rate  of  wages  in  the  United  States  was  fixed  by 
the  wages  which  a  man  might  earn  as  a  laborer  in  agricult- 
ure, not  as  a  land-owner,  there  might  be  logical  force  in 
the  constant  injunction  by  all  free-traders  to  "  take  to  the 
land."  Professors  Perry  and  Sumner  iterate  it,  times  with- 
out number :  "  The  comfort  the  laborer  could  win  on  the 
land  fixes  a  ininimum  below  which  Avages  can  not  fall.  If 
they  do  temporarily  fall  below  that  minimum,  the  laborers 
take  to  the  land,  as  they  did  in  the  hard  times  a  few  years 
ago.  Since  the  comfort  obtainable  from  an  abundance  of 
cheap  and  fertile  land  is  high,  the  minimum  of  wages  is 
high." 

It  is  submitted,  that  this  does  not  meet  the  exigencies 
of  the  argument.  We  are  seeking  the  causes  of  the  aver- 
age rate  of  wages,  which  must  be  above  the  minimum. 
"  The  comfort "  a  laborer  wins  on  the  land  is  not  a  matter 
of  which  market  values  can  be  predicated,  and  a  foreign 
commerce  must  be  based  on  exportable  values.     If  "  hard 


GENERAL  THEORY  OF  WAGES.  357 

times  "  drive  the  laborer  to  the  land,  it  is  a  temporary  ex- 
pedient. There  is  no  occasion  to  have  any  confusion  of 
ideas  on  tliis  subject.  If  high  wages  grow  out  of  agricultu- 
ral pursuits,  the  argument  is,  it  is  because  agriculture  gives 
high  returns  for  labor,  and  we  should  buy  abroad  our  other 
commodities  with  the  products  of  this  most  efficient  labor. 
The  food  and  raw  materials  which  can  be  raised  by  a  great 
nation  of  fifty  millions  of  people,  great  as  they  are  in  vol- 
ume, are  not  great  enough  to  override  the  law  of  supply 
and  demand,  and  the  consequences  of  a  loss  of  purchasing 
power.  Tlie  proprietors  of  this  vast  aggregate  of  indus- 
tries are  as  amenable  to  market  values  as  the  single  owner 
of  the  Apollinaris  Spring,  the  group  of  individuals  who 
own  the  oil-wells,  and  the  corporations  that  control  the 
anthracite  coal  fields  of  Pennsylvania.  In  each  case  they 
own  efficient  instruments  of  production,  but  their  efficiency 
consists  only  in  a  precise  adjustment  of  production  to  con- 
sumption. A  monopoly  of  ownership  in  the  wells,  or  a 
limitation  in  the  area  of  coal,  makes  this  possible.  If  the 
number  of  farms,  or  the  agricultural  area,  were  Hmited,  the 
American  farmers  might  use  the  leverage  such  a  situation 
would  give  them ;  they  might  keep  within  the  demands  of 
the  outside  world,  and  assert  their  superiority  against  the 
world.  But  the  fathers  of  the  republic  threw  open  a  do- 
main almost  without  limit,  and  invited  mankind  to  come 
and  subdivide  it  into  farms  almost  beyond  enumeration. 
It  resulted  in  a  great  surplus  of  food,  which  the  farmer  did 
not  need,  and  which  he,  at  least,  must  part  with  •  to  enjoy 
all  his  advantages,  but  which  the  outside  world  could  not 
take  off  his  hands.  "  Man  does  not  live  by  bread  alone." 
His  wants  of  shelter,  mental  and  moral  culture,  and  his 
social  ambitions,  are  just  as  urgent  in  demanding  gratifica- 
tion. He  will  make  as  much  effort,  pay  as  much,  for  one 
as  the  other.     "Whoever  renders  the  services  which  termi- 


358  PROTECTION    VS.   FREE  TRADE. 

nate  in  the  satisfaction  of  these  various  desires  will  receive 
his  wages.  "Whoever  makes  the  things  needed,  whether 
food,  clothing,  colleges,  churches,  or  theatres,  will  get  his 
pay  according  to  his  work,  provided  the  work  is  necessarily 
done  in  this  political  entity.  Prof.  Sumner,  therefore,  im- 
proves his  own  statement,  which  we  have  just  quoted,  when 
he  adds  :  "  High  wages,  therefore,  simply  mean  that  the 
soil  of  this  continent  is  rich,  tlie  climate  is  excellent  and 
well  varied,  the  rivers  are  large  and  convenient,  the  mount- 
ains are  full  of  metal  and  coal,  the  people  are  industrious 
and  energetic,  and  are  eager  to  accumulate,  the  public  order 
is  fairly  secure,  and  the  general  intelligence  is  good.  The 
conditions  of  production  are  therefore  good,  and  we  pro- 
duce a  great  deal.  We  accumulate  capital  far  more  rapid- 
ly than  any  other  people  in  the  worldP 

Undoubtedly.  But  all  this  production  does  not  come 
from  cultivating  the  land,  nor  are  the  values  of  products  con- 
ferred by  agriculture,  nor  on  the  basis  of  agricultural  labor. 
"We  do  not  share  the  abundance  of  the  owner  of  the  soil. 

To  recall  what  Bastiat  says :  "  A  man  who  has  in  his 
hands  the  tools  necessary  for  labor,  the  materials  to  work 
upon,  and  the  provisions  for  his  subsistence  during  the 
operation,  is  in  a  situation  to  determine  his  own  remuner- 
ationP     This  has  been  our  situation. 

This  is  the  state  of  our  industry  under  the  facts  as  they 
are,  and  under  a  protective  tariff.  In  his  address  before 
the  Tariff  Commission  (and  it  is  a  very  energetic  address) 
Prof.  Sumner  undertakes  to  demonstrate  that  a  protective 
tariff  lowers  wages.  I  give  a  paragraph  of  it,  and  the  reply 
of  Mr.  George  Basil  Dixwell,  and  submit  to  the  practical 
judgment  and  common  sense  of  the  reader  which  is  the 
natural  version  of  the  facts.  No  demonstration  is  possible, 
because  of  the  absence  of  any  second  term  with  which 
comparison  can  be  made. 


GENERAL  THEORY  OF  WAGES. 


359 


Prof.  Sumner  :  "  Let  us  next 
look  at  the  effect  of  protective 
taxes  on  the  alternative  which  is 
open  to  the  American  laborer  to 
go  upon  the  land.  The  protective 
taxes  enliance  the  cost  of  all  arti- 
cles of  clothing,  furniture,  crock- 
ery, utensils,  tools,  and  machine- 
ry. They  also  increase  the  cost 
of  fuel  and  transportation.  They, 
therefore,  reduce  the  amount  of 
all  the  commodities  mentioned, 
which  a  farmer  can  get  for  a  cer- 
tain amount  of  farm  products. 
They,  therefore,  lessen  the  profits 
of  agriculture  in  all  its  forms,  and 
lessen  the  attractiveness  of  the 
land.  Whatever  lessens  the  at- 
tractiveness of  the  land  lowers 
the  minimum  gain  of  all  manual 
laborers,  increases  the  number  of 
competitors  in  the  labor  market, 
and  reduces  the  amount  whicli  the 
employer  needs  to  bid  in  order  to 
counteract  the  advantages  of  the 
land.  Protective  taxes,  there- 
fore, take  away  from  the  laborer 
the  advantage  which  he  has  by 
nature  in  this  country  ;  that  is  to 
say,  they  take  away  from  him 
part  of  his  advantage  in  the  labor 
market.  Conseq^uently^  they  low- 
er wages." 


Mr.  Dixwell :  "  The  truth  is 
as  follows  :  Protection  prevents 
a  vast  number  of  people  from  fly- 
ing to  the  land,  and  makes  them 
consumers  instead  of  producers 
of  raw  materials.  It  diminishes 
the  aggregate  of  the  farmer's 
products  and  increases  the  de- 
mand. It,  therefore,  increases  the 
profits  of  agriculture  in  all  its 
forms,  and  increases  the  attract- 
iveness of  the  land.  Wliatever 
increases  this,  increases  tlie  mini- 
mum gain  of  all  manual  laborers, 
and  increases  the  number  of  com- 
petitors for  labor,  and  increases 
the  amount  which  the  employer 
needs  to  bid  in  order  to  counter- 
act the  advantages  of  the  land. 
Protection,  therefore,  secures  to 
the  laborer  the  advantage  which 
he  has  by  nature  in  this  country, 
and  increases  it  by  diversifying 
employments.  Consequently,  it 
raises  wages  above  what  they 
would  be  under  foreign  competi- 
tion. At  the  same  time,  it  has- 
tens the  moment  when  increasing 
skill  may  compensate  for  the  high- 
er moneyed  cost  of  labor." 


Prof.  Sumner  unquestionably  undertook  a  very  difficult 
piece  of  inductive  reasoning.  Even  with  the  assumptions 
of  an  illimitable  foreign  market,  and  the  ability  of  a  lim- 
ited .  number  of  farmers  to  maintain  a  monopoly  of  pro- 
duction, only  a  moderate  success  attends  his  effort.     "  Pro- 


360  PROTECTION    VS.   FREE   TRADE. 

tective  taxes  "  have  not  enlianced  the  cost  of  the  farmer's 
living  in  any  different  proportion  from  what  they  have  that 
of  all  the  other  co-workers,  members  in  the  same  society. 
It  is  one  of  tlie  attempts  of  which  Mr.  Mill  has  said,  "  no 
one  could  have  looked  closely  into  the  sources  of  fallacious 
thinking  without  beeing  deeply  conscious  that  the  coher- 
ence and  neat  concatenation  of  one's  philosophic  systems  is 
more  apt  than  we  are  commonly  aware  to  pass  with  us  as 
evidence  of  their  truth." 

One  ought  to  be  cautious  in  very  positive  assertion  in  a 
case  where  absolute  knowledge  is  out  of  the  question,  but 
one  may  be  allowed  to  suggest  that  the  Professor's  "  conse- 
quently "  bears  a  very  susj^icious  resemblance  to  the  "  ar- 
gal"  of  the  clown  in  the  grave-digging  scene  in  "Hamlet." 


CHAPTER  XYI. 

WHY   INDUSTPwIAL    ENTITIES    SHOULD   COEEESPOND    WITH 
POLITICAL    ENTITIES,^ 

Peof.  Walkee  remarks:  "It  is,  of  course,  possible 
tliat  sorae  new  analysis  of  the  conditions  of  production 
may  yet  disclose  the  law  which  thus  makes  trade  within 
the  lines  of  sovereignty  beneficial,  and  trade  across  the 
boundaries  of  separate  states  deleterious  to  one  or  both 
parties ;  but,  thus  far,  assertion,  coupled  with  vituperation, 
has  taken  the  place  of  the  analysis  required." 

We  venture  to  submit  one  form  of  analysis,  and  it  does 
not  seem  necessary  to  accompany  it  with  vituperation. 

It  is  indispensable,  if  a  given  nation  is  to  live  on  a 
given  area,  that  opportunity  should  be  afforded  them  to 
render  mutual  services  to  each  other,  or  to  somebody 
somewhere  else.  Otherwise  there  would  be  no  nation  on 
such  a  portion  of  the  planet.  If  there  were  no  such  oppor- 
tunity, the  nation  would  be  non-existent.  There  is  no  ex- 
isting or  historical  nation  in  which  the  vast  mass  of  services 
by  which  men  satisfy  each  qther's  desires  have  not  been 
rendered  within  the  lines  of  the  political  entity.  To  that 
extent  the  political  entity  and  the  industrial  entity,  as  mat- 

•  In  plain  English,  this  inquiry  means,  why  should  the  people  of  a 
given  nation  (a  political  entity)  endeavor  so  to  arrange  matters  that  the  capi- 
tal and  labor  of  its  people  (the  industrial  entity)  should  in  the  main  be  em- 
ployed in  rendering  services  to  one  another,  within  the  geographical  limits 
which  the  given  people  inhabit  ? 
11 


362  PROTECTION    VS.  FREE  TRADE. 

ter  of  fact,  do  correspond.  There  are,  however,  in  the  or- 
dinary case  left  outstanding,  certain  needs  which  are  to  be 
supphed  by  international  exchanges.  If  the  given  nation 
was  the  product  of  purely  economic  forces — was  composed 
of  "economic  men,"  and  became  one  of  a  group  of  in- 
dustrial countries  constituting  a  larger  industrial  society, 
formed  hy  free  trading,  the  group,  as  a  whole,  would  con- 
tinue to  subserve  its  purposes  by  free  trade. 

This  is  not  an  identical  proposition,  but  it  is  so  nearly 
such  as  to  reduce  the  question  at  the  head  of  this  chapter 
to  a  mere  abstract  inquiry  :  for  there  is  no  such  industrial 
group  as  yet  on  the  earth. 

"  The  most  that  can  be  said,  at  present,  so  far  as  an 
economy  of  mankind,  or  a  world-economy  is  concerned,  is 
that  it  may  be  shown  that  important  preparations  have 
been  made  for  it.  We  are  approaching  more  nearly  to  it, 
by  the  ways  of  the  more  and  more  cosmopolitan  character 
of  science,  the  increasing  international  co-operation  of  labor, 
the  improvement  in  the  means  of  transportation,  growing 
emigration,  the  greater  love  of  peace,  and  the  greater  toler- 
ation of  nations,  etc."  (Roscher,  "Political  Economy," 
sec.  12.)  1 

The  industrial  group  so  fonned  would  in  no  wise  cor- 
respond with  the  actual  political  groups  as  we  now  see 
them  on  our  political  maps.  The  external  relations  of  the 
nations  not  having  grown  out  of  economic  movements, 
there  is  no  «  priori  certainty,  or  even  likelihood,  that  the 
"  seiwices  "  of  the  individuals  in  them  would  or  could  be 
so  rendered  to  each  other,  as  if  the  aggregate  of  the  na- 
tions, constituting  the  industrial  society,  had  been  evolved 

'  "  The  hypothesis,  in  accordance  with  which  this  science  should  discard 
all  consideration  of  the  state,  or  should  refuse  to  presuppose  its  formation, 
would  lead  us  into  an  ideal  region,  difficult  to  define,  probably  entirely  im- 
possible, and  inaccessible  to  experience."     (Roscher,  sec.  17.) 


INDUSTRIAL   AND   POLITICAL   ENTITIES.  363 

under  the  action  of  steady,  nninterrupted  economic  forces 
alone.  A  nation  is  the  resultant  of  many  forces,  of  which 
the  economic  is  not  the  strongest.  The  people  of  a  nation, 
if  the  nation  is  to  exist,  may  be  compelled  to  exchange 
services  with  each  other  on  the  soil  of  the  nation.  Such  we 
have  seen  to  be  the  case  in  the  United  States,  where  in  any 
event  the  people  must  produce  at  home  about  seven  eighths 
of  their  consumption  of  commodities  in  which  other  na- 
tions have  been  unable  to  help  them  out.  The  other  na- 
tions do  not  need  our  services  to  the  extent  of  more  than 
one  fourth  part  in  the  exchanges  which  involve  an  expendi- 
ture, at  home  and  abroad,  of  $2,800,000,000.  If,  now,  free 
trade  breaks  up  our  power  to  render  these  services  to  each 
other  here,  we  at  once  come  to  a  reason  wliy  our  industrial 
entity  should  correspond  witli  our  poHtical  entity.  The 
United  States,  in  truth,  is  the  best,  as  it  is  the  only,  type 
of  a  nation  which  has  been  generated  by  the  harmonious 
co-operation  of  moral,  social,  political,  and  economic  forces. 
Here  the  pohtical  and  industrial  entity  substantially  do 
correspond.  Certainly,  the  nearer  the  correspondence,  the 
stronger  the  nation. 

The  people  of  a  nation  are  bound  together  by  senti- 
ments different  in  degree,  not  in  kind,  from  those  which 
bind  together  the  members  of  a  household.  In  the  nation, 
as  in  the  family,  there  is  a  vast  multitude  of  services  ex- 
changed between  its  members  which  are  not  economic. 
The  economic  and  non-economic  services  are  grounded  in 
the  same  substratum  of  humanity,  and  the  effort  to  sepa- 
rate them  and  render  one  here  and  the  other  with  people 
in  another  family,  simply  means  disintegration.  It  is  the 
union  and  mutual  exchange  of  these  two  kinds  of  services 
which  result  in  our  weKare  and  create  the  sentiment  known 
as  patriotism.  It  is  a  genuine  emotion,  and  is  a  true  eco- 
nomic force.     It  reconciles  us,  also,  to  accept  the  averaged 


3G4r  PROTECTION    VS.  FREE  TRADE. 

results  of  our  efficiency  expended  on  our  own  physical 
conditions.  It  engenders  that  sense  of  community  which 
operates  with  such  force  in  family  and  nation.  "  Thanks 
to  this  feeling  for  the  common  weal,  the  eternal  and  de- 
structive war — the  helium  omnium  contra  omnes — which 
an  unscrupulous  self-interest  would  not  fail  to  generate 
among  men  engaged  in  the  isolated  prosecution  of  their 
own  economic  interests,  ceases  in  the  higher,  well-ordered 
organization  of  society.  On  it  are  based  the  various  forms 
of  economy  in  common — family  economy,  corporation  or 
association  economy,  municipal  economy,  and  national 
economy.  And  these  forces  of  economy  in  common  are 
so  essentially  the  condition  and  comj)lement  of  industrial 
economy  that  the  latter  without  them  could  either  not  be 
maintained  at  all,  or,  at  least,  only  in  the  very  lowest  stage 
of  civilization."  (Hoscher,  "  Political  Economy,"  section 
12.)  If  that  nation  must  be  the  richest  in  wliich  each  in- 
dividual is  most  completely  left  to  himself,  savage  nations 
would  be  the  richest. 

Every  independent  household  management,  then,  con- 
tains the  germ  of  all  poHtico-economic  activity. 

Bear  in  mind  we  are  deahng  with  a  national  family, 
thus  predisposed  by  various  considerations  to  satisfy  their 
desires  by  exchanges  of  services,  primarily,  with  each  other 
when  they  can  ;  with  strangers,  foreigners,  when  they  must ; 
and  further  wilhng  and  desirous  that  the  family  may  be  as 
large  and  prosperous  as  possible.  A  group  of  economic 
Ti2ii\oinQ,  formed  hy  free  trade,  might  do  well  to  continue  to 
exchange  freely  with  each  other.  They  have  reached  an 
adjustment,  and  no  redistribution  of  its  labor  or  its  capital 
will  take  place.  They  go  on  and  grow,  or  dechne  together. 
If  the  United  States  belonged  from  the  start  with  such  a 
group,  we  might  go  on  and  continue  to  enjoy  the  average 
prosperity  or  adversity  of  the  group. 


INDUSTRIAL  AND  POLITICAL  EXTITIES.  305 

But  we  have  reached  a  development  very  different  from 
that  which  these  conditions  imply.  It  is  confessed  by  all 
candid  economists  that  a  redistribution  of  labor  and  capi- 
tal must  take  place  if  a  comitry  passes,  for  instance,  from 
protection  to  free  trade.  "  There  are  men,  however,  who 
live  solely  by  their  labor,  and  then  if  labor  is  suppressed 
they  have  no  alternative  but  extinction.  Like  machines, 
then,  free  trade  may  oblifije  workmen  to  remove  from  one 
place  to  another.  .  .  .  When  such  displacement  is  accom- 
plished, men  will  everywhere  be  better  off  by  reason  of  the 
greater  productiveness  of  their  labor,  but  they  will  perhaps 
be  differently  distributed  "  (among  the  nations  of  the  earth, 
he  means),  "  and  this  can  not  be  effected  without  suffering  " 
(and  capital  must  follow  labor).  "  The  practical  conclusion, 
is,  that  we  should  create  no  fresh  legal  monopolies  by  means 
of  which  workmen  are  settled  lohere  nature  can  not  yield 
them  a  large  recompense  "  (the  italics  are  mine),  "  but  that 
when  such  monopoKes  already  exist,  the  tariffs  which  main- 
tain them  must  be  reformed  M-ith  pradence  and  circum- 
spection." (Dr.  de  Laveleye,  "  Elements  of  Political  Econ- 
omy," p.  238.) 

"  A  similar  injurious  effect  might  result  in  this  country 
from  the  sudden  introduction  of  free  trade,  or  even  from  a 
sudden  great  diminution  of  protection.  .  .  .  But  it  rday  be 
for  a  while  harmful  to  the  labor  and  capital  which  have 
been  employed  in  the  protected  industries.  This  labor  and 
capital  may  not  be  able  to  withdraw  with  ease  from  their 
existing  occuj)ation  to  the  more  productive  industries  which 
need  no  protection."  (Prof.  Taussig,  De  Laveleye,  supra, 
p.  277.) 

The  point  of  the  citations  is  to  call  attention  to  the  re- 
distribution which  must  take  place  in  capital  and  labor. 
Of  course,  there  can  be  no  assurance  that  it  might  not  be 
redistributed  entirely  out  of  the  United  States. 


366  TROTECTIOX    VS.   FREE   TRADE. 

"We  take  tlie  case  put  bj  Prof.  Sidgwick  in  his  "  Politi- 
cal Economy,"  at  page  494 : 

"  Suppose  a  country  (A)  so  thickly  populated  that  addi- 
tional agricultural  produce  could  not  be  obtained  from  the 
soil  except  at  a  rapidly  -increasing  expense,  and  suppose 
that  one  third  of  its  actual  produce  of  this  kind — say,  for 
brevity,  com — is  now  consumed  by  the  persons  engaged  in 
its  chief  branches  of  manufacture.  Suppose  that  the  coun- 
try, having  been  strictly  protected,  adopts  free  trade,  and 
that  consequently  the  manufactures  in  question  are  ob- 
tained at  half  the  price  from  another  country  (B)  in  ex- 
change for  corn.  And  for  simplicity  let  us  assume  that 
the  result  of  the  fall  in  price  is  that  the  sajne  total  price  is 
paid  for  the  manufactures  annually  consumed."  (Observe 
that  Mr.  Sidgwick  puts  his  supposition  in  terms  which 
could  never  be  so  favorably  realized  in  this  country.) 
"  What,  then,  are  the  manufacturing  laborers,  thrown  out 
of  work  by  the  change,  to  do  ?  The  course  most  obviously 
suggested  by  the  circumstances  is  that  they  should  emi- 
grate and  supply  the  labor  required  in  the  extended  manu- 
factures of  B,  or  in  the  newly  developed  trade  between  A 
and  B.  If  they  do  not  do  this,  there  seems  to  be  no  gen- 
eral ground  for  assuming  that  they  will  be  able  to  find 
employment  in  A  as  remunerative  as  that  withdra-wn  from 
them,  .  .  .  And  if  they  could  not  be  profitably  employed 
in  agriculture,  it  is  theoretically  possible  that  they  could 
not  be  employed  at  all,  so  that  the  natural  result  of  free 
trade  may  be  that  A  will  only  support  a  smaller  though 
wealthier  pojndation — the  economic  gain  resulting  from  it 
to  the  community,  as  a  whole,  being  a  gain  which  it  would 
require  violent  governmental  interference  to  distribute,  so 
as  to  retain  the  laborers  thereon  out  of  work."  ^ 

'  If  we  accept  the  dolorous  pictures  of  Hon.  Frank  Eurd,  David  A.  Wells, 
and  others,  they  could  not  profitably  be  employed  in  our  agriculture,  for 


INDUSTRIAL  AND  POLITICAL  ENTITIES.  367 

A  redistribution  would  then  take  place  between  the 
United  States  and  the  other  political  entities  composing 
the  international  group  of  free-trading  communities — that 
is,  the  United  States  would  witness  the  migration  of  many 
laborers  and  the  transfer  of  much  capital  to  other  fields  of 
employment.  That  would  result,  obviously,  in  a  less  gross 
annual  product  of  this  nation's  industry.  If  free  trade, 
under  the  laws  of  economy,  would  depopulate  the  country, 
and  decapitalize  it,  I  suppose  it  is  one  of  the  functions  of 
American  statesmen  to  erect  barriers  to  that  sort  of  exodus. 
Whether  those  who  remained  would  be  better  off  is  not 
the  question.  The  welfare  and  happiness  of  those  driven 
away  are  equally  objects  of  concern  with  those  whom  for- 
tune or  accident  may  place  it  in  their  power  to  remain. 

If,  we  repeat,  the  nations  of  the  earth,  and  their  politi- 
cal and  industrial  relations,  had  been  evolved  from  a  com- 
mon economic  center,  and  had  widened  out  on  economic 
motives  alone,  no  economic  reason  could  be  given,  of 
course,  why  the  industrial  entity  should  correspond  to  the 
political  entity,  for  the  whole  would  then  constitute  one 
industrial  group.  Having  been  thus  generated,  the  whole, 
in  fact,  is  one  industnal  entity,  and  political  lines  are  of  no 
moment.  In  the  group  thus  generated,  the  introduction 
of  protectioti  would  produce  a  redistribution  and  probably 
a  very  serious  distm'bance  of  labor  and  capital.  Concern- 
ing an  aggregate  of  trading  nations  thus  formed,  the  ques- 
tion is  about  as  pertinent  as  if  we  were  to  ask  why  a  curve 
equally  distant  at  all  its  points  from  the  center  should  cor- 
respond to  a  circle.     It  would,  for  that  is  the  law  of  its 

food,  they  say,  is  already  "rotting  on  the  ground";  and  if  we  accept  the 
pictures  English  statesmen,  like  Lord  Salisbury  and  the  Earl  Dunraven,  give 
us,  free  trade  in  England  has  distributed  the  labor  and  capital  employed  on 
iron  ship-plates  from  England  to  Belgium,  and  has  left  the  laborers  in  its  silk 
manufactures  stranded  in  idleness.     They  are  too  poor  to  emigrate. 


368  PROTECTION  VS.  TREE   TRADE. 

case.  But  from  the  equation  of  a  circle  you  can  not  gener- 
ate an  ellipse.  Whether  the  curve  might  not  under  other 
conditions  have  been  better  as  an  ellipse  would  be  an  in- 
quiry more  germain,  in  the  facts  of  the  actual  world.  The 
question,  then,  we  are  discussing  assumes  the  existence  of 
certain  facts  to  which  it  is  applicable.  And  the  statesmen 
of  a  country  (whatever  the  economists  may  propose)  do  not 
deliberately  incline  to  destroy  the  political  entity  in  their 
charge,  that,  with  its  fragments,  they  may  piece  out  some 
new  industrial  whole.  It  is  certainly  conceivable  that  the 
economic  services  which  Germans  on  German  soil,  or 
Frenchmen  on  French  soil,  could  render  to  citizens  of 
other  nations,  might,  so  to  speak,  give  out,  and  they  yet 
retain  the  capacity  to  serve  each  other.  It  is  conceivable 
that  there  might  be  nothing  which  they  could  do  so  much 
better  than  the  workmen  of  other  nations,  that  with  the 
surplus  they  could  buy  what  they  wanted  of  them — nor 
is  it  inconceivable  that  the  suq^lus  of  the  other  nations 
should  happen  to  be  in  the  very  commodities  which  the 
Gennans  and  Frenchmen  could  make  for  themselves.  The 
motive  to  foreign  trade  ceases.  In  that  case  German  and 
French  statesmen  provide  for  keeping  their  workmen  em- 
ployed on  services  to  be  exchanged  at  home.  Were  it 
otherwise,  the  German  and  French  laborers,  acting  on  eco- 
nomic considerations  alone,  might  be  driven  from  their 
native  land.  There  might  be  nothing  else  for  them  to 
do.  But  they  are  held  (the  great  majority  are)  to  the 
fatherland  and  to  la  helle  France  by  social  and  political 
motives,  overruling  the  economic  motives.  The  one  tends 
to  take  them  out  of  the  country,  the  other  tends  to  keep 
them  in.  And  so  Bismarck  and  Thiers,  in  patriotic  co- 
operation with  their  people,  provide  by  defensive  duties 
that  all  their  population  may  mutually  serve  each  other  on 
their  native  soil.     They  do  not  presume  to  "enlighten 


INDUSTRIAL  AND   POLITICAL   ENTITIES.  SGO 

tlieir  desire  for  profit " — that  takes  care  of  itself.  The 
problem  is  simply  to  provide  the  opportunity  of  economic 
labor,  for  a  population  born  or  thrown  together  on  a  given 
geographical  area,  on  which  area  there  are  overruling  po- 
litical motives  for  maintaining  a  political  entity.  The  indus- 
trial entity  must  then  be  made  to  conform  to  the  political 
entity,  or  both  perish.  Drop  all  considerations  of  patriot- 
ism, social  ties,  kindred,  politics,  and  submit  to  the  economic 
forces  alone,  and  I  grant  there  would  be  no  economic  rea- 
son for  any  correspondence  of  the  industrial  and  political 
entities,  in  the  case  of  these  two  nations.  But,  then,  there 
might  be  no  economic  reason  for  the  existence  of  Germany 
or  France.  The  people  and  statesmen  alike  of  these  na- 
tions would  hardly  consent  to  follow  this  abstraction,  pretty 
as  it  is,  to  the  point  of  their  self-annihilation.  We  have 
at  last,  come  to  one  economic  problem  which  can  not  "  be 
solved  independently  "  of  sociological  considerations. 

The  protective  tax  may  operate  to  shield  the  low-priced 
labor  (the  "  weak ")  against  the  high-priced  labor  (the 
"  strong "),  or  to  defend  the  high-priced  labor  against  the 
low-priced  labor,  the  "  strong "  against  the  "  weak."  It 
has  exactly  the  advantage  which  Prof.  Sumner  states,  in 
order  to  ridicule  it,  that  "  it  goes  as  well  one  end  foremost 
as  the  other."  Why  ?  Because  it  is  all  the  while  nothing 
but  a  proposal  to  enable  the  inhabitants  of  a  given  politi- 
cal entity  to  wage  their  war  for  subsistence  against  nature, 
on  their  own  soil,  on  which,  we  assume,  they  do  not  at- 
tempt anything  which  is  forbidden  by  the  nature  of  things 
— the  nature  of  their  things.  Common  products  may  be 
obtained  equally  well  in  any  properly  developed  country. 
In  this  connection,  the  words  "  strong  "  and  "  weak  "  have 
no  relevancy.  If  they  had,  all  economic  men  ought  to,  and 
would,  live  in  the  strong  nation.  But,  as  tliere  are  valid 
reasons  why  all  men  do  not  and  can  not,  the  inhabitants  of 


370  PROTECTION    VS.   FREE  TRADE. 

weak  nations  must  continue  to  provide  material  services 
which  they  may  render  each  other — the  fruitful  employ- 
ment of  the  forms  of  labor  which  mutually  replace  each 
other. 

It  is  not  denied  that  great  migrations  are  constantly 
taking  place  on  the  face  of  the  earth.  The  ex])ulsion  of 
the  llugucnots  from  France,  in  consequence  of  the  revoca- 
tion of  the  Edict  of  Nantes,  transferred  bodily  to  Holland 
and  England  certain  great  industries,  much  to  the  loss  of 
France.  This  was  expulsion  by  force,  but  free  trade  might 
do  the  same. 

These  are,  it  seems  to  me,  valid  reasons  why  statesmen 
do  not  submit  to  the  redistribution  of  capital  and  lahor 
which  free  trade  must  bring  about  between  the  group  of 
freely  trading  nations.  It  is  the  old  judgment  of  Napoleon, 
that  the  economists  would  grind  the  empire  to  powder,  even 
tliough  it  was  made  of  adamant.  These  considerations, 
it  seems  to  me,  show  the  expediency,  and  indeed  "  the  ne- 
cessity of  drawing  the  hues  of  industrial  circumvallation 
along  the  boundaries  of  empire." 

But  now  we  take  the  reverse  problem.  Take  the 
United  States,  for  example.  "  Here,"  says  the  free-trader, 
"  are  thirty-eight  States,  trading  among  themselves  with  the 
utmost  activity,  the  exchange  of  commodities  and  services 
being  free  as  the  movements  of  the  air,  and  in  this  freedom 
all  good  citizens  rejoice.  But  this  condition  of  things  is 
made,  by  the  doctrine  under  examination,  to  be  dependent 
entirely  upon  the  political  relations  of  these  States.  Were 
they  under  different  governments^  the  exchange  of  com- 
modities and  services  which  now  promotes  the  general 
wealth  and  the  general  welfare  would  be  fraught  with 
mischief  and  possible  ruin." 

The  United  States  are  an  industrial  entity,  as  they  are  a 
political  entity.    The  industrial  entity  took  the  form  it  did 


IXDIJSTRIAL   AND   POLITICAL  ENTITIES.  371 

for  the  reason,  and  the  only  reason,  that  the  exchanges  of 
commodities  and  services  wove  as  "  free  as  the  movements 
of  the  air."  The  exchanges  were  thus  free  because  it  was 
a  poHtical  entity.  Living  under  the  same  laws,  customs, 
language,  traditions,  religion,  and  ideals,  the  competition 
of  ditferent  capitals  was  absolutely  effective,  and  the  com- 
petition of  labor  effective  over  large  areas.  This  resulted, 
in  the  industrial  entity  submitted  to  these  conditions,  in  as 
exact  a  correspondence  of  remuneration,  in  all  employ- 
ments, with  the  sacriiice  undergone,  as  is  possible  under 
existing  human  progress.  The  conditions  resulted  from 
the  uniformity  compelled  by  the  political  entity.^  We  are 
what  we  are  because,  while  under  the  same  moral,  social, 
and  pohtical  forces,  we  developed  also  under  the  free  play, 
between  the  States,  of  economic  forces,  pulling  with  them. 
"VVe  pooled  our  issues ;  we  submitted  to  that  community  of 
results  which  community  of  interest  dictated.  It  is  not  sup- 
posed that  an  American  economist  or  an  American  states- 
man cares  in  which  State,  or  in  what  part  of  the  political 
unit,  the  greatest  prosperity  is  achieved — on  what  points 
its  capital  and  labor  are  concentrated.  The  migration  of 
the  instniments  of  production  takes  the  place  of  a  trade 
in  products.  That  is,  capital  and  labor  are  perfectly  mo- 
bile within  the  limits  of  the  nation.  If  a  man  doesn't  like 
things  in  one  State,  he  goes  to  another,  without  leaving  his 
pohtical  habitat.  An  American  will  neither  go  to  Mexico 
nor  send  his  money  to  Peru,  as  he  would  migrate  to  Colo- 

'  "  One  of  the  principal  conditions  determining  the  relative  profitableness 
of  particular  occupations  and  the  terms  on  which  their  products  are  ex- 
changed consists  in  the  degree  of  faciUty  which  happens  to  exist  for  moviug 
capital  and  labor  from  one  to  the  other.  Now,  this  facility  is  very  different 
in  the  case  of  occupations  carried  on  within  the  limits  of  a  single  country 
and  those  carried  on  in  different  countries ;  and  in  this  difference  is  to  be 
found  the  chief  fact  discriminating  the  phenomena  of  international  from  those 
of  domestic  trade.'''' — Prof.  Caienes,  "Political  Economy,"  p.  302, 


372  rnoTECTiON  vs.  free  trade. 

rado  or  make  his  investments  in  California.  But,  subject 
Mexico  and  Peru  to  American  civilization,  laws,  customs, 
and  society,  incorporate  them  in  our  political  entity,  and 
the  economic  and  social  objections  to  the  transfer  would 
begin  to  disappear.^  The  greatest  total  annual  product  of 
the  nation's  industry  is  the  object  of  concern.  Nobody, 
imder  these  circumstances,  cares  whether  the  yard  of  calico 
is  made  in  Lowell  or  Ealeigh ;  w^hether  the  ton  of  iron  is 
made  in  Johnstown  or  Birmingham  ;  whether  the  locomo- 
tive is  made  in  Paterson  or  Atlanta.  The  outcome  is  the 
common  possession,  and  contributes  to  the  common  glory 
and  happiness  of  one  people — one  pohtical  entity.  "We  get 
the  best  effects,  because  the  economic,  social,  and  political 
forces  are  all  m  operation  at  once,  supplementing  each 
other.  Those  who  take  the  atomistic  view  of  our  structm-e 
do  not  tlnis  think.  The  gentleman  before  referred  to,  as 
representing  the  Iowa  State  Free-Trade  League,  says :  "  It 
does  not  matter  to  us  whether  our  tribute  goes  to  Pennsyl- 
vania or  to  Europe.  So  fai'  as  we"  (Iowa  free-traders) 
"  are  concerned,  I  will  say  it  is  better  to  have  manufactures 
at  home  "  (in  Iowa),  *'  but  it  does  not  concern  us  a  particle 
to  have  them  in  Pennsylvania  or  Massachusetts."  A  httle 
matter  like  that  never  concerns  an  American  free-trader 
any  more  than  it  does  a  member  of  the  Cobden  Club. 
This,  for  illustration  only,  but  it  is  not  a  true  view  of  an 
organism.  There  is  a  sense  in  which  the  Iowa  farmer 
need  not  care,  as  a  fanner,  whether  his  wheat  is  consumed 
in  New  York  or  Liverpool.  The  market  which  Kew  York 
affords  is,  2^ro  tanto,  as  valuable  as  that  of  Liverpool.  If 
market  prices  are  fixed  at  Liverpool,  it  is  because  free  trade 
has  brought  the  whole  earth  into  competition  with  him. 
If  the  price  in  Liverpool  is  less  than  the  price  in  New 

'  The  last  census  shows  that  there  arc  seven  millions  of  our  inhabitants 
living  in  States  other  than  those  of  their  birth. 


INDUSTRIAL  AND  POLITICAL  ENTITIES.  373 

York,  plus  the  cost  of  carriage  (whicli  it  sometimes  is),  the 
"Pennsylvania"  or  "Massachusetts"  market  may  be  in- 
dispensable to  him,  as  a  farmer.     Bnt  this  is  collateral. 

If  we  treat  the  States  of  the  Union  as  nations  consti- 
tuting a  larger  national  entity,  we  may  freely  grant  that 
the  permanent  stoppage  of  a  channel  of  trade  which  free 
competition  would  open  could  not,  in  the  words  of  Prof. 
Sidgwick,  "  tend  to  increase  the  wealth  of  the  industrial 
society  formed  hy  the  aggregate  of  nations  whose  trade  is 
thus  restricted — supposing  such  nations  to  be  composed  of 
economic  men." 

But  while  political  motives  and  social  motives  have 
constrained  the  States  to  form  the  political  aggregate,  it 
by  no  means  as  yet  appears  that  any  given  member  of  the 
aggregate  7nay  not  have  sacrificed  mere  economic  progress 
in  joining  the  Union.  The  group,  as  a  whole,  may  be 
better  oft",  but  one  or  more  members  of  it  Tnay  be  the 
worse  oft  by  reason  of  the  unrestricted  trade.  That  is, 
upon  the  geographical  area  which  some  one  State  occupies, 
there  might,  to-day,  have  been  more  men  and  money, 
more  population  and  wealth,  if  it  had  remained  a  distinct 
political  and  industrial  entity ;  and  have  enlarged  its  do- 
mestic exchanges  by  restrictions  upon  its  foreign  exchanges. 
For  example,  Michigan,  by  means  of  protection,  might 
have  drawn  to  itself  manufactures  of  iron,  cotton  and 
woolen  goods  which  now  swell  the  inventory  of  wealth  in 
Pennsylvania  and  Massachusetts. 

It  might  not  be  difiicult  to  prove  that  "  the  South,"  as 
a  geographical  section,  with  her  special  cotton  product, 
has  been  a  loser  by  virtue  of  her  membership  in  this  group 
of  free-trading  States.  Her  failure  early  in  the  century  to 
turn  her  labor  upon  the  manufacture  of  her  own  cotton  into 
the  fabrics  which  her  laborers  consumed,  was  an  economic 
blunder.     For  such  industries,  aside  from  slavery,  the  only 


374  PROTECTION    VS.  FREE   TRADE. 

disadvantage  tlie  South  labored  under  was  tliat  the  JS'orth 
began  hers  sooner.  As  an  independent  entity,  and  with 
restrictions,  she,  as  a  section^  might  liave  been  wealthier 
than  she  is.  If,  now,  the  South  persists  in  the  line  of 
development  upon  which  she  has  started,  she  will  cause  a 
redistribution  of  the  labor  and  capital  of  the  naticn,  which 
will  enrich  her  as  a  section.  The  citizen  of  the  denuded 
section  may  go  with  the  new  tide  if  he  choose.  He  may 
remain  and  continue  as  a  patriot  to  rejoice  in  the  aggregate 
prosperity  of  the  country.^ 

AVe  may  find  other  illustrations  of  the  reasons  why 
free  trading  between  industrial  entities  may  profitably  stop 

1  The  following  curious  dialogue  took  place  before  the  Tariff  Commis- 
sion, Prof.  Sumner  being  on  the  "  witness  "-stand  ("  Report,"  vol.  ii,  p. 
2331): 

"  Commissioner  Kenner :  '  That  is  the  doctrine '  (referring  to  Prof.  Sum- 
ner's previous  free-trade  discourse)  '  that  has  been  advocated  in  the  South 
for  the  last  fifty  or  sixty  years.' 

"  The  witness :  '  And  I  hope  they  will  stick  to  it.' 

"  Commissioner  Kenner :  '  They  will  not  stick  to  it ;  they  have  seen  the 
folly  of  it.' 

"  The  witness :  '  They  are  going  to  begin  to  manufacture  there,  to  their 
very  great  loss,' 

"  Commissioner  Oliver :  '  To  their  loss  or  Xew  England's  loss  ? ' 

"  The  witness :  '  New  England  can  stand  it.  I  do  not  think  it  would  be 
any  loss  to  the  country  if  there  was  no  New  England.' 

"  Commissioner  Kenner :  '  I  agree  with  you  in  that  last  remark,  that  it 
would  be  no  loss  to  the  country.' 

"  The  witness :  *  And  it  would  be  no  harm  to  the  country  if  there  was  no 
Louisiana.' 

"  Commissioner  Kenner :  '  Yes,  there  would  be.  I  wish  you  would  prove 
that  proposition.  We  tried  to  leave  the  country  and  you  would  not  let  us, 
and  yet  you  say  it  would  be  no  loss.  That  is  a  non  sequitur  which  I  do  not 
understand.' 

"The  witness:  'We  should  all  live  here  and  be  happy,  and  get  our  liv- 
ing, even  if  there  wasn't  any  New  England,  any  Louisiana,  or  any  Pennsyl- 
vania, I  suppose.' " 

The  Professor  is  evidently  willing  to  take  his  chances  against  all  catas- 
trophes— as  a  "  clanless,  masterless  man." 


INDUSTRIAL  AND   POLITICAL  ENTITIES.  375 

at  the  lines  of  a  political  entity,  and  open  and  close  with 
the  shifting  lines  of  nationality. 

Napoleon  found  France,  Italy,  Belgium,  and  Austria 
independent  kingdoms,  with  custom-houses  on  their  out- 
posts. When  they  became  component  parts  of  his  empire, 
he  abolished  these  obstacles  to  internal  commerce  and  in- 
troduced free  trade  throughout  its  limits.  Now,  the  inquiry 
of  the  free-trader  is,  how  can  the  advantage,  the  gain  of 
exchanges,  depend  u^Don  the  accident  whether  the  parties 
to  it  are  or  are  not  citizens  of  the  same  political  entity  ? 
The  answer  to  the  question  is  tolerably  obvious.  On  the 
supposition  that  France,  Italy,  Belgium,  and  Austria  could 
become  a  homogeneous  people,  with  common  laws,  lan- 
guage, institutions,  and  aspirations,  the  only  trae  marks  of 
nationality  (and  which,  of  course,  were  not  realized,  but 
wiiich  Napoleon  affected  to  assume  would  be  realized,  in 
order  to  give  his  conquest  the  appearance  of  rational  states- 
manship), there  would  then  have  been  the  economic  condi- 
tions under  which  competition  becomes  effective,  and  labor 
and  capital  perfectly  mobile.  In  all  the  empire  the  laborer 
moves  freely  to  his  work,  and  his  migration  takes  the  place 
of  an  exchange  of  products.  The  parties  to  the  exchange 
may  move  out  of  the  lines  of  the  old  political  entity.  By 
the  assumption,  both  labor  and  capital  would  be  transferred 
to  the  localities  and  the  industries  within  the  empire — the 
new  industrial  entity — which  would  have  rendered  them 
most  efficient.  There  w^ould,  in  due  time,  have  been  a 
redistribution  of  the  population  and  a  reorganization  of 
industry.  Taking  the  empire  as  a  whole,  there  would  have 
been  the  greatest  annual  product  of  the  industry  of  its 
people.  Without  undertaking  to  forecast  the  changes  in 
detail,  it  is  evident  that  one  or  more  of  these  states  would 
have  suffered  a  drainage  of  population  and  a  diminution 
of  capital  which,  as  a  state,  might  have  crippled  it  and  re- 


376  PROTECTION  VS.   FREE  TRADE. 

dueed  its  relative  importance,  but  wliich,  as  a  component 
part  of  the  empire,  was  of  no  sort  of  consequence.  These 
changes,  when  become  permanent,  would  have  given  great 
and  powerful  strength  to  the  empire.  If,  now,  it  is  again 
broken  up  into  separate  kingdoms,  it  will  be  seen  that  this 
regime  of  free  trade  within  the  limits  of  the  empire  has 
degraded  or  ruined  some  of  them.  In  rearranging,  for 
the  best  advantages,  the  industiial  forces  of  the  empire  on 
new  lines,  some  of  the  areas  of  territory  which  constituted 
the  original  states  would  have  been  denuded  of  portions 
of  their  money  and  men,  drawn  off  into  new  fields.  As 
parts  of  the  empire,  such  inhabitants  as  remained  in  these 
areas  of  reduced  production  could  recoup  themselves  by 
sentiments  of  pride  and  patriotism  which  terminated  in 
the  national  prosperity.  If  they  expected  to  reap  eco- 
nomic results,  they  would  have  to  move  into  some  other 
part  of  the  empire.  When  the  geographical  subdivision 
again  became  a  separate  political  entity,  and  the  old  po- 
litical lines  were  restored,  it  might  simply  find  itself  hope- 
lessly poor,  and,  to  recover  its  status  quo,  be  compelled  to 
recall  its  men  and  money  by  imposing  the  old  duties  and 
setting  up  the  old  line  of  custom-houses.  All  which 
shows  that  free  trade  may  be  good  policy  between  the 
members  of  certain  kinds  of  industrial  groups,  and  bad 
policy  between  other  kinds.  The  groiqy  may  gain,  but  a 
speclfiG  member  may  lose.  The  very  fact  that  the  nations 
of  the  earth  are  of  all  sizes,  shapes,  physical  resources,  and 
ethnical  characteristics,  shows  that  they  were  not  fonned  • 
by  economical  or  industrial  but  by  political  and  social 
motives.  Pohtical  motives  dam  up  productive  forces  in 
certain  pools ;  free  trade,  operating  on  industrial  motives, 
draws  them  down  to  a  certain  water-level.  It  is  manifest 
that  the  drainage  may  uncover  one  or  more  of  them.  The 
political  motive  fills  them  with  men — the  industrial  motive 


INDUSTRIAL  AND  POLITICAL  ENTITIES.  377 

may  empty  them.  Non-competing  nations  ^\ill  gain,  be- 
cause tliey  need  not  occupy  the  same  level ;  competing 
nations  may  be  drained  to  the  bottom  and  emjjtied  of  pro- 
ductive agencies — labor  and  capital,  men  and  money. 

We  can  see,  at  least,  the  tinal  conditions  under  which 
the  industrial  entity  need  not  correspond  with  the  political 
entity — the  terms  on  which  alone  universal  free  trade  is 
possible.  It  will  not  come,  and  it  can  not  come,  until  the 
final  status  of  the  industry  of  each  political  entity  has  been 
fixed,  when  all  "  natural "  advantages  have  been  explored, 
when  "acquired"  advantages  have  asserted  their  mastery 
in  the  great  and  deadly  competition  of  races  and  ideals,  and 
when  men  have  discarded  all  patriotic  pride  in  the  nation, 
and  sunk  their  allegiance  to  their  proper  j)olitical  entity 
into  the  vague  worship  of  some  abstract  industrial  entity. 
When  their  relative  "  advantages  "  have  come  to  be  recog- 
nized by  the  nations,  and  each  accepts  its  place  in  the  hier- 
archy of  industry,  then,  and  only  then,  can  free  trade  be 
true  in  theory  as  it  will  be  in  practice.  Then  the  economic 
man  will  correspond  with  the  historical  and  moral  man. 
^Nationality  will  give  place  to  cosmopolitanism,  labor  and 
capital  will  have  undergone  their  final  redistribution  over 
the  surface  of  the  globe.  Then  the  "  seller,  as  such,"  may 
shoulder  his  peddler's  pack  and  seek  the  "buyer  as  such," 
at  the  farthest  end  of  the  earth,  and  make  that  "  swap " 
which  has  been  the  "  reason  of  his  being "  ;  and  no  man 
shall  say,  "  Tarifi ! " 

In  the  mean  time  the  American  statesman  will  continue 
to  busy  himself  with  the  original  question.  How  can  the 
people  of  Ids  country  create  the  greatest  annual  product  of 
their  comhined  industry,  and  prevent  that  product  from 
being  distributed  out  of  the  hands  of  its  true  owners  m 
this  poKtical  entity — the  workmen  of  the  republic  ? 


CIIAPTEE  XYII. 

A    FALLACY    WniCH    FKEE-TEADEES    PUT   IN   THE   MOUTHS    OF 
PKOTECTIONISTS — CREATING   INDUSTRY. 

It  remains  to  dispose  of  one  otlier  fallacy  whicli  free- 
traders are  apt  to  indulge  in  ;  or,  rather,  to  unload  the  fal- 
lacious assumptions  which  free-traders  put  into  the  mouth 
of  the  protectionist.  The  purpose  to  confuse  the  argu- 
ment is  manifest  from  the  very  way  in  which  they  set 
about  to  state  their  questions. 

"  How  can  anybody  then  intelligently  suppose  that  a 
hocly  of  taxes^  which  somebody  must  pay,  can  be  so  cun- 
ningly adjusted  as  to  become  2^  positively  productive  agent, 
a  spur  to  the  progress  of  society  ?  Taxes  of  some  kind  are, 
indeed,  necessary,  but  how  they  can  be  made  a  blessing  to 
the  payers  and  enrich  the  whole  society,  they  must  explain 
who  suppose  that  possil)le,  provided  they  can  explain  it." 
(Perry,  "  Political  Economy,"  p.  480.)  ^ 

*  Prof.  Robert  Ellis  Thompson,  in  his  "  Political  Economy,"  pp.  243-428, 
had  maintained  that  "  protection  to  industry  gives  the  farmer  an  abundant  and 
steady  market  for  his  breadstuffs,  and  creates  a  market  for  crops  more  remu- 
nerative than  grain."  Perry,  in  his  work  at  page  504,  replies ;  the  underscored 
passages  in  the  reply,  on  careful  study,  will  be  found,  I  submit,  to  render  the 
answer  a  palpable  failure :  "  A  higjer  home  market  consists  in  more  domestic 
buyers  than  before,  all  ready  with  acceptable  pa>j  in  their  hands.  If  protec- 
tion can  enlarge  the  home  market,  it  must  be  by  cither  increasing  the  number 
of  births  or  dbniHishhig  the  number  of  deaths  in  a  given  time  in  a  given  coun- 
try.(!)  Precisely  how  a  big  bundle  of  taxes,  wtiich  the  whole  population  must 
pay  in  one  form  or  another,  may  be  made  to  slimidate  birtlis  or  prolong  lives, 
no  reasonable  man  can  see,  though  a  protectionist  may  sec  it.     If  he  can  see 


A  FALLACY  ASCRIBED  TO  PROTECTIONISTS.  379 

"  It  is  evident  tliat  a  protective  tariff  can  not  render  any 
foreign  capital  or  labor  available  to  help  the  nation  which 
lays  the  tariff.  If  a  nation  lays  import  duties  for  revenue, 
some  part  of  them  may  fall  on  the  foreigner ;  but  if  it  lays 
such  duties  for  protection,  it  keeps  foreign  goods  out.  If, 
then,  the  foreigner  stays  at  Jiome,  and  is  forced  to  keep  his 
goods  at  home,  the  protecting  country  can  not  make  use  of 
Lim  or  his  goods  in  any  way  whatever  to  suit  its  ends  or 
avert  its  misfortunes.  Whatever  effect  the  jDrotective  taxes 
exert,  must  be  exerted  in  the  protecting  country,  on  its  own 
labor  and  capital.  Any  favor  or  encouragement  which  the 
protective  system  exerts  on  one  group  of  its  population 
must  be  won  by  an  equivalent  oppression  exerted  on  some 
other  group.  To  suppose  the  contrary,  is  to  deny  the  most 
obvious  appHcation  of  the  conservation  of  energy  to  eco- 
nomic forces.  If  the  legislature  did  not  siynply  transfer 
capital,  it  would  have  to  tnake  capital  out  of  nothhig.  We 
can  not  coUect  taxes  and  redistribute  them  without  loss, 
much  less  can  we  produce  forced  monopolies  and  distorted 
industrial  relations  without  loss."  (Prof.  Sumner,  "  Prince- 
ton Review.")  Whether  the  words  "  forced  monopolies  " 
and  "  distorted  industrial  relations  "  are  truly  descriptive  of 
our  industrial  organization  is  exactly  the  question  at  issue. 

it  and  show  it,  his  task  is  then  but  half  done,  for  he  must  see  and  show  how 
these  same  men's  taxes  may  multiply  return  services  in  the  hands  of  this  in- 
creased population.  If  he  try  to  get  out  of  this  snug  place  by  claiming  that 
the  better '  home  market '  is  made  by  new  immigrants  with  values  in  their 
hands,  he  can  not  escape  by  this  route,  because  he  must  first  see  and  show 
what  there  is  in  hir/  fares  to  invite  immigrants  at  all ;  and  besides,  he  is  scared 
even  by  the  handiwork  of  '  pauper  labor,'  and,  of  course,  he  is  not  prepared 
to  welcome  the  '  pauper  laborers  themst-lves  ! '  " 

The  political  policies  of  the  country  invited  immigrants  which  even  "  big 
taxes  "  did  not  repel.  The  economic  policy  which  increased  the  number  of 
those,  whether  natives  or  immigrants,  who  are  not  engaged  in  farming,  but 
must  live  on  its  products  and  pay  for  them,  did  "  multiply "  the  "  return 
services"  and  enlarged  the  farmer's  "home  market." 


380  PROTECTION    VS.   FREE   TRADE. 

"  There  is  not,  and  there  never  can  be,  any  positive 
virtue  in  restraint,^''  is  the  language  of  Prof.  Walker.  "  Its 
only  office  for  good  is  to  prevent  waste,  and  save  the  mis- 
direction of  energy.  There  can  be  no  life  in  it,  and  no 
force  can  come  out  of  it.  That  which  is  called  '  protection ' 
operates  only  by  restraint;  it  has,  and  can  have,  neither 
creative  jpower  nor  healing  efficacy.  All  the  energy  that 
is  to  produce  wealth,  exists  before  it  and  without  resjpect  to 
it,  and,  just  to  the  extent  to  which  protection  operates  at 
all,  it  operates  by  impairing  that  energy,  and  reducing  the 
sum  of  wealth  that  might  be  produced  if  protection  did  not 
exist." 

Now  it  is  manifest  that  the  foregoing  propositions  of 
Profs.  Perry,  Sumner,  and  Walker  are  based  on  the  assump- 
tion that,  without  protection,  all  the  productive  energies  of 
a  given  people  are  already  devoted  to  the  most  productive 
employments,  that  they  are  all  fully  employed,  and  that 
there  is  "  nothing  else  "  to  which  they  might  be  directed 
with  equal  efficiency,  and  without  "  waste  "  and  "  loss." 

It  would  be  difficult  in  the  same  number  of  words  to 
state  more  misconcej)tions  of  the  attitude  of  protectionists ; 
more  perversions  of  the  application  of  words  to  things ;  a 
more  glaring  example  of  the  ignoratlo  eleiichi,  as  the  logi- 
cians call  it.  It  is  an  attempt  to  transfer  to  the  region  of 
mental  dynamics  the  notion  of  "  the  conservation  and  cor- 
relation of  forces,"  as  understood  in  respect  to  the  material 
world.  The  man  who  applies  a  match  to  a  powder-maga- 
zine creates  nothing.  But  the  motive  which  induces  him 
to  apply  the  match  is  the  ocGasion  of  an  explosion,  and 
operates  to  produce  rather  striking  results. 

The  protectionist  proposes  to  create  nothing.  lie  can 
create  neither  matter  nor  material  forces.  The  energy  he 
proposes  to  set  free  is  already  in  the  men  and  things  he 
deals  with.     Tic  finds  abundant  stores  of  it  in  the  human 


A  FALLACY  ASCRIBED  TO  PROTECTIONISTS.  381 

agencies  and  the  matter  about  liim.  When  the  cno-ineer  sub- 
jects  coal  to  the  process  of  combustion,  under  the  boiler  of  an 
engine,  he  sets  in  motion  mighty  machinery.  He  creates 
nothing.  He  only  correlates  results — he  sends  them  through 
a  structural  organization.  He  sets  free  the  forces  in  the 
coal,  and  he  loosens  the  spring  under  which  his  owti  ener- 
gies had  been  coiled.  The  protective  statute  furnishes  the 
motive  for  his  exploding  the  powder-magazine.  J^ew  pro- 
ductive agencies  are  released ;  the  protective  statute  has 
removed  the  restriction  which  had  rendered  both  product- 
ive tools,  the  man  and  machine,  inert  and  useless.  The 
American  man  and  the  American  coal  were  as  if  they  were 
non-existent,  so  long  as  we  substituted  the  foreign  man  and 
the  foreign  coal  for  him  and  it.  It  may  be  that  we  could 
produce,  with  their  joint  effort,  "  something  else,"  and  use 
both  the  domestic  and  foreign  combination,  but  that  is  a 
distinct  issue.  If  the  two  schemes  will  not  work  together 
— and,  as  we  have  seen,  we  must  use  the  one  or  the  other — 
which  scheme  results  in  the  greatest  annual  product  of  the 
nation's  industry  %  Which  method  of  procedure  results  in 
the  satisfaction  of  the  greatest  number  of  the  desires  of  the 
people  of  the  country?  These  questions  raise  the  true 
issue. 

Prof.  Sumner  takes  some  pains  to  disprove  the  idea 
that  a  new  country  might  need  "  a  lift "  (as  he  calls  it)  to 
move  it  on  in  the  way  of  growth.  John  Rae,  in  his  "  Po- 
litical Economy  "  (page  56  et  seq.\  had  very  dispassionately 
proved  this.  And  this  is  the  case  to  which  Mr.  Mill  had 
made  decided  concessions.  It  seems  a  work  of  supereroga- 
tion to  adduce  "  authority  "  to  estabhsh  a  proposition  which 
lies  so  open  to  observation  and  common  sense. 

Prof.  Poscher,  not  an  unqualified  protectionist  ("  Politi- 
cal Economy,"  Appendix  III,  sec.  1),  agrees :  "  Directly, 
therefore,  these  hindrances  to  importation  produce  no  in- 


382  PROTECTIOX  VS.   FREE  TRADE. 

crease,  but  only  a  change  in  the  direction  of  the  national 
forces  of  capital  and  labor  "  (assuming  that  every  man  ca- 
pable of  working  always  busies  himself,  producing  for  a 
remunerative  market),  '•  an  increase  only  in  case  that  for- 
eign  jproducers  are  thereby  caused  to  transfer  their  pro- 
ductive forces  within  oxir  limits  ;  which  may  certainly  be 
considered  the  greatest  triumph  of  the  protective  system." 

And  then  he  adds  (sec.  4),  as  to  the  educational  and 
economic  effects  of  the  industrial  protective  system  : 

"The  sacrifices  which  the  protective  system  directly 
imposes  on  the  national  wealth  consist  in  products,  fewer 
of  which,  with  an  equal  straining  of  the  productive  forces 
of  the  country,  are  produced  and  enjoyed  than  free  trade 
would  j)rocure  "  (temporarily).  "  But  it  is  possible  by  its 
means  to  huild  up  new  2)roductive  forces,  to  awaTcen  slum- 
bering ones  from  their  sleep,  which,  in  the  long  run,  may 
be  of  much  greater  value  than  those  sacrifices.  "Who  would 
say  that  the  cheapest  education  was  the  most  advantageous  ? 
Only  by  the  development  of  industry  does  a  nation's  econ- 
omy become  mature.  The  merely  agricultural  state  can 
attain  neither  to  the  same  j^opidation,  nor  the  same  energy 
of  capital,  to  say  nothing  of  the  skillfulness  of  labor,  as  the 
mixed  agricultural  state,  nor  can  it  employ  its  natural 
forces  so  completely  to  advantage.  How  many  beds  of 
coal,  waterfalls,  hours  of  leisure,  and  how  much  aptitude 
for  the  arts  of  industry  can  be  turned  to  scarcely  any  ac- 
count in  a  merely  agricultural  state  ?  If,  therefore,  the 
protective  system  could  materially  promote  a  national  in- 
dustry, or  if  it  made  such  industry  possible  for  the  first 
time,  the  sacrifice  connected  therewith  in  the  beginning 
should  be  considered  like  the  sacrifice  of  seed  made  by  the 
sower.  But  this  can  be  justified  only  on  the  three  follow- 
ing conditions  :  That  the  seed  is  capable  of  germinating  ; 
that  the  soil  be  fertile  and  properly  cultivated,  and  that  the 


A  FALLACY  ASCRIBED   TO   niOTECTIONISTS.  383 

season  is  favorable?^  All  wliich  conditions  are  fairly  met 
in  the  American  industrial  protective  system. 

The  protective  statute  renders  possible  the  formation 
of  the  structural  organization,  peculiar  to  a  given  country, 
through  which  the  productive  forces  take  effect.  Prof. 
AValker,  in  the  citation  made,  intimated  that  "  protection 
reduced  the  sum  of  wealth  that  mujht  be  produced  if  pro- 
tection did  not  exist."     He  felt  constrained  to  add : 

"  I  say  that  might  be  produced,  not  that  would  he  pro- 
duced. The  latter  point  may  fairly  be  disputed  between 
the  free-trader — who  should  rather  be  called  the  free-pro- 
ducer— and  the  advocate  of  the  system  of  restricted  jiro- 
duction.  The  channel  of  the  river  adds  nothing  to  the 
force  with  which  the  water  within  its  banks  tends  to  its 
level.  On  the  contrary,  that  force  is  reduced  by  the  fric- 
tion between  the  flowing  water  and  the  sides  of  the  chan- 
nel. Yet  it  is  the  water  confined  in  rivers,  and  not  water 
spreading  widely  over  the  fields,  which  yields  power  to 
manufacturing  industry.  The  force  of  the  steam  at  the 
piston-head  is  less  than  the  force  of  the  steam  in  the 
boiler,  less  by  all  that  is  necessary  to  conduct  it  thither 
from  the  boiler;  yet  it  is  the  force  of  the  steam  at  the 
piston-head,  and  not  where  it  is  generated,  which  moves 
the  engine."  ^ 

'  HoTv  production  {not  creation)  ensues  upon  bringing  the  right  men  into 
contact  with  right  conditions  is  shown  by  Prof.  Senior  ('•  Political  Economy," 
p.  134).     Free  trade  for  Ireland  separated  the  productive  forces  in  Ireland. 

"  The  climate,  the  soil,  and  the  situation  of  Ireland  have  been  described 
as  superior,  and  certainly  are  not  inferior,  to  our  own.  Her  poverty  has  been 
attributed  to  the  want  of  material  capital,  but  were  Ireland  now  to  exchange 
her  native  population  for  seven  millions  of  our  English  north-country  men, 
they  would  quickly  create  the  capital  that  is  wanted.  And  were  England, 
north  of  Trent,  to  be  peopled  exclusively  by  a  million  of  families  from  the 
west  of  Ireland,  Lancashire  and  Yorkshire  would  still  more  rapidly  resem- 
ble Connauglit.     Knowledge  has  been  called  power — it  is  far  more  certainly 


384:  PROTECTION    VS.   FREE   TRADE. 

But  we  have  a  most  notable  example  of  the  productive 
effects  of  restrictions.  The  restrictive  statute  in  this  case 
became  the  banks  which  confined  the  water  in  its  channel 
— it  became  the  means  of  conveying  the  force  of  the  steam 
at  the  boilers  to  the  piston-head.  This  is  the  English 
Navigation  Act.  Enacted  in  the  time  of  Cromwell,  re- 
enacted  and  extended  three  times  in  the  reign  of  Charles  II, 
it  remained  on  the  statute-book  for  two  hundred  years,  and 
was  only  repealed  after  it  had  wrought  its  full  effects 
as  the  scaffolding  for  English  commercial  and  marine  su- 
premacy. Adam  Smith,  "  the  free-trader,"  the  apostle  of 
"natural  liberty,"  called  it  "that  great  prohibitive  and 
protective  laio,  intended  to  advance  the  merchant  marine, 
the  wisest  of  all  English  commercial  regulations." 

John  Adams  says  of  it  ("  Life  and  Works,"  vol.  x,  p. 
330) :  "  Earth,  air,  sea,  all  colonies  and  all  weaker  nations 
were  to  be  made  subservient  to  the  growth  of  the  British 
navy  and  marine,  wliich  in  turn  were  to  be  the  instruments 
for  the  enlargement  of  British  wealth,  British  commerce, 
British  power,  and  British  domination,  as  much*  so  as  all 
nations  and  things  were,  in  times  past,  to  be  sacrificed  to 
the  grandeur  of  Rome." 

It  resulted,  as  intended,  in  making  Englishmen  the  sole 
manufacturers,  the  sole  carriers,  and  the  sole  middle-men 
for  all  the  colonies,  and  for  most  of  the  nations  of  the  earth, 
until  her  supremacy  was  threatened  by  the  great  rival  built 
up  out  of  her  own  colonies  here  under  the  American  pro- 
tective system.  The  preamble  to  the  act  was  in  these 
words : 

wealth.  Asia  Minor,  Syria,  Egypt,  and  the  northern  coast  of  Africa  were 
once  among  the  richest,  and  are  now  among  the  most  miserable,  countries  in 
the  world,  simply  because  they  have  fallen  into  the  hands  of  a  people  with- 
out a  sufficiency  of  the  immaterial  sources  of  wealth  to  keep  up  the  material 
ones.'''' 


A   FALLACY  ASCRIBED   TO   rROTECTIOXISTS.  385 

"  In  regard  liis  Majesty's  plantation  beyond  seas  are  in- 
habited and  peopled  by  bis  subjects  of  tliis,  liis  kingdom 
of  England,  for  the  maintaining  a  greater  correspondence 
and  kindness  between  them,  and  keejnng  them  in  a  firmer 
dependence  xcpon  it,  and  rendering  them  yet  more  hene- 
fi^ial  and  advantageous  to  it,  in  further  employment  and 
increase  of  English  shipping  and  seamen,  vSnt  of  English 
woolens  and  other  manufactures  and  commodities,  render- 
ing the  navigation  to  and  from  the  same  more  safe  and 
cheap,  and  making  this  kingdom  a  stajjle,  not  only  of  the 
commodities  of  these  plantations,  but  also  of  the  commodi- 
ties of  other  countries  and  places  for  the  supplying  of 
them." 

The  following  striking  summary  of  its  results  is  given 
by  Mr.  Eben  Greenough  Scott  ("The  Development  of 
Constitutional  Liberty  in  the  English  Colonies  of  America," 
p.  188) : 

"  At  last,  when  England  was  rent  by  cruel  strife,  and  in 
a  predicament  so  sorry  as  to  render  her  an  object  of  insult 
to  the  domineering  Dutch,  just  at  the  time  when  it  could 
be  least  expected  of  her  to  rise  and  resent  affront,  and 
when,  perhaps,  she  herself  did  not  seriously  contemplate 
such  an  act,  just  at  that  time  she  took  the  step  which 
henceforth  wrought  such  a  wonderful  change  in  the  des- 
tiny of  herself  and  of  her  rival.  In  a  few  years  the  carry- 
ing-trade of  Holland  declined,  her  magnificent  fleet  was 
brought  to  its  destruction,  the  commerce  of  the  world  was 
transferred  from  the  Dutch  to  the  English  shipping,  the 
supremacy  of  the  ocean  was  shifted  from  the  decks  of  Van 
Tromp  to  those  of  Blake,  and  England  was  started  upon  a 
career  of  prosperity  which  at  last  made  her  mistress  of  the 
seas.  All  this  was  accomplished  by  an  act  of  Parliament 
in  1651,  in  the  time  of  Cromwell.  It  provided  simply 
that  thenceforward  no  goods — the  product  of  Asia,  Africa, 

18 


386  PROTECTION  VS.   FREE  TRADE. 

or  America — should  be  imported  into  England  or  exported 
out  of  it  but  in  vessels  belonging  to  the  people  of  Eng- 
land, and  that  no  goods,  the  produce  or  manufacture  of 
any  part  of  Europe,  should  be  imported  unless  in  Enghsh 
ships,  or  the  ships  of  the  country  where  such  goods  were 
produced  or  manufactured ;  and  that  of  these  English  ships 
the  master,  and  three  foiu'ths  of  the  marines,  should  be 
Enghsh.  ...  Its  results  far  transcended  the  wildest  dreams 
of  Lombard  and  Venetian  avarice,  or  the  grandest  schemes 
of  Spanish  and  Portuguese  conquest.  It  not  only  secured 
to  the  people  who  enacted  it  the  greatest  share  of  the  world's 
carrying-trade — Trade  knew  its  master,  and  followed  at 
once  with  becoming  servility." 

At  this  time  the  aristocracy  in  England  held  monopo- 
lies in  the  trade  in  hides,  wool,  salt,  gold  thread,  flax,  hemp, 
and  many  other  commodities.  All  the  guilds  were  monop- 
ohsts. 

There  was  one  vast  scheme  of  monopolies,  the  results 
of  royal  grants  for  the  purposes  of  royal  revenue.  There 
was  no  competition  in  the  internal  trade  and  manufactures 
of  the  country.  Under  the  Navigation  Act  these  monopo- 
lies passed  from  individuals  to  the  people  at  large.  Hence- 
forth the  colonies  were  regarded  mainly  as  feeders  to  Eng- 
land's carrying-trade,  or  consumers  of  her  manufactures,  or 
factories  for  the  distribution  of  its  capital,  and,  in  a  word,  as 
mere  commercial  appendages  of  a  great  commercial  power. 

Adam  Smith  summarized  results  in  these  words :  "  A 
great  empire "  (the  American  colonies)  "  has  been  estab- 
lished for  the  sole  pui-pose  of  raising  up  a  nation  of  con- 
sumers, who  should  be  obliged  to  buy  from  the  shops  of 
our  different  producers  all  the  goods  with  which  they 
could  supply  them,"  The  idea  of  "  a  lift "  is  not  so  gro- 
tesque after  all.  The  Navigation  Act  lay  exactly  athwart 
the  path  which  the  natural  liberty  of  the  individual  die- 


A   FALLACY   ASCRIBED   TO  PROTECTIONISTS.  387 

tated  that  he  had  a  riglit  to  enjoy,  both  in  offering  his  la- 
bor and  commodities  in  any  market  in  the  world  he  might 
choose. 

The  view  we  have  been  combating  is  the  modern 
form  of  the  old  argument  of  Adam  Smith  and  John  Stuart 
Mill — the  only  solid  argument  either  ever  offered  against 
governmental  interference  in  a  nation's  industries.  It  is 
in  substance  this.     Adam  Smith  says  : 

"If  a  foreign  country  can  supply  us  with  an  article 
cheaper  than  we  can  make  it  ourselves,  we  had  better  buy 
it  with  some  part  of  the  product  of  our  own  industry,  em- 
ployed in  a  way  in  which  we  have  some  advantage."  (We 
liave  seen  that  we  can  not  buy  our  supply  of  the  large 
number  of  articles  we  need.)  "  The  general  industry  of 
the  country,  being  always  in  proportion  to  the  capital 
which  employs  it,  will  not  thereby  be  diminished,  no  more 
than  that  of  the  above-mentioned  artilicers,  but  only  left 
to  find  out  the  way  in  which  it  can  be  employed  to  the 
greatest  advantage.  In  every  period,  its  revenue  might 
have  been  the  greatest  which  its  capital  could  afford." 

Here  we  are  back  to  the  wages-fund  theory,  which  is 
no  longer  considered  tenable.  Doubtless,  "  to  find  out  the 
way  "  is  the  burden  of  the  problem  we  are  trying  to  solve. 
The  argument  proceeds  on  the  assumption  that  labor  is  all 
the  while  working  as  hard  as  it  can  on  the  most  profitable 
employment,  and  that  a  definite  limited  fund  of  capital 
only  is  at  its  disposal.  Tliis  is  more  exactly  expressed  by 
Mr.  Mill: 

"  Yet  in  disregard  of  a  fact  so  evident "  (that  a  part 
only  of  the  capital  of  a  country  is  allotted  to  the  support  of 
productive  labor,  and  there  will  not  and  can  not  be  more 
of  that  labor  than  the  portion  so  allotted  will  feed  and  pro- 
vide with  the  materials  to  work  on),  "  it  long  continued  to 
be  believed  that  laws  and  government,  without  creating 


388  TROTECTIOX  VS.   FREE  TRADE. 

cajntal,  could  create  industry^  not  by  making  the  people 
more  laborious  or  increasing  the  efficiency  of  their  labor — 
these  ai*e  objects  to  Avhicli  the  government  can  in  some 
degree  contribute — but  when  the  people  already  worked  as 
hard  and  slc'dlfulbj  as  theij  could  he  made  to,  it  was  still 
thought  that  the  government,  without  providing  additional 
funds  could  create  additional  employment." 

It  is  incredible  that  any  sane  economist  ever  thought 
that  a  man  "  could  work  harder  or  more  sldllfully  than  he 
could,"  capital  or  no  capital.  A  protectionist  has  no  need 
of  an  identical  proposition  like  that. 

The  syllogism  of  Adam  Smith  and  Mr.  Mill,  when  put 
in  form,  is  this : 

Major  Premise. — Industry  can  be  increased  only  by 
the  increase  of  capital. 

Minor  Premise. — Laws  and  government  can  not  in- 
crease capital. 

Conclusion. — Therefore,  laws  and  government  can  not 
increase  industry. 

As  Judge  Phillips  says  in  his  "  Proposition  concerning 
Protection  and  Free  Trade  "  :  "  This  is  very  transparent 
logic ;  the  sophism  is  glaring.  The  major  is  what  old 
Kobert  Burton  would  designate  '  a  stupend  fallacy.'  " 

Mr.  George  Basil  Dixwell,  in  his  "  Premises  of  Free 
Trade  examined,"  has  dragged  the  fallacy  into  the  open 
day,  and  the  series  of  propositions  is  seen  to  turn  on  a  ques- 
tion of  fact,  and  not  on  a  process  of  deductive  reasoning. 

"  But  to  make  the  latter  proposition  flow  from  the  first,- 
a  vast  gap  has  to  be  filled.  It  requires  to  be  proved  that, 
in  a  normal  condition  of  things,  there  is  no  unemployed 
capital,  and  no  funds  which,  although  intended  for  unpro- 
ductive consumption,  are  capable  of  being  instantly  turned 
to  the  support  of  production  the  moment  that  a  new  indus- 
try introduced  by  a  protective  law  presents  a  profitable 


A  FALLACY  ASCRIBED   TO   niOTECTIONISTS.  389 

field  of  employment,  Tliis  is  a  question  of  fact,  and  the 
moment  we  inquire  into  the  facts  we  iind  that  the  unem- 
ployed capital  in  the  United  States  is  vast,  probably  much 
exceeding  $1,000,000,000,  and  that  the  ability  to  re-enforce 
this  out  of  the  funds  intended  for  unproductive  consump- 
tion within  the  year  is  also  most  probably  a  good  deal  over 
$700,000,000.  Before  these  facts  the  whole  argument  falls 
to  pieces." 

It  ought  not  to  be  necessary  to  cite  "  authority  "  for  an 
obvious  fact,  but  we  venture  a  citation  from  a  modern 
English  economist :  "  Even  on  extraordinary  occasions, 
when  unlooked-for  events  in  the  political  or  commercial 
world  disturb  ordinary  calculations  and  give  enormous  ad- 
vantage to  particular  industries — such  occasions,  for  exam- 
ple, as  occurred  in  the  early  years  of  railway  enterprise,  or 
a^ain  in  the  linen  trades  on  the  breaking  out  of  the  Ameri- 
can  AVar — even  on  such  occasions  the  equilibrium  of  re- 
muneration and  cost  can  always  be  restored,  not,  indeed,  in 
a  moment,  but  after  no  long  delay,  through  the  action  of 
labor  and  capital  still  uncominitted  to  actual  industrial 
emploijment^  and  loiihout  any  sensible  encroachment  on  the 
stock  already  actively  employed.  The  existence  of  a  large 
amount  of  capital  in  commercial  countries  in  disposable 
form,  or,  to  speak  less  equivocally,  in  the  form  of  money 
or  other  purchasing  power  capable  of  being  turned  to  any 
purpose  required,  is  a  patent  and  tmdeniable  fact.  Nor 
is  it  less  certain  that  this  capital  is  constantly  seeking  the 
best  investments,  and  rapidly  moves  toward  any  branch  of 
industry  that  happens  at  the  moment  to  offer  special  atten- 
tions."    (Cairnes,  "  Some  Leading  Principles,"  etc.,  p.  63.) 

No.  The  protective  statute  does  not  create  energy. 
It  releases  the  productive  forces  which  await  the  joint 
action  of  the  human  agent  and  the  material  instrument. 
This  action  the  protective  statute  induces.     It  never  was  a 


390  PROTECTIOX  VS.   FREE  TRADE. 

question  of  the  "  conservation  and  correlation  of  forces," 
but  a  simple  question  of  commercial  fact. 

"  Do  the  restraints  imposed  by  law  have  the  effect  to 
direct  the  productive  force  generated  by  human  wants,  set- 
ting in  motion  human  labor,  to  act  upon  the  natural  agents 
of  production  with  a  better  actual  result  than  under  the 
rule  of  freedom?  "If  the  protectionist  can  show  this," 
says  Prof.  Walker,  "  he  will  make  his  case.'''' 

AYe  feel  entirely  confident  that  tliis  question  has  been 
affirmatively  answered  in  the  discussion  of  facts  in  fore- 
going chapters. 


CHAPTER  XYIII. 

INDUSTRIAL     RESULTS    ACHIEVED — SOME     PRACTICAL     MAXIMS 
OF    TARIFF    REFORM. 

"We  have  endeavored  to  conduct  this  inquiry  on  the 
sole  consideration  of  economic  results — that  is,  results  ter- 
minating in  the  greatest  product  of  industry,  realized  in 
wages,  profits,  and  rents,  and  ultimately  in  consumable 
commodities  and  desirable  services.  The  only  use  made  of 
social  considerations  has  been  to  account  for  the  common 
aims  which  inspire  us  ;  of  j^oUtical  considerations,  has  been 
that  they  furnish  the  common  legal  conditions  under  which 
we  work ;  of  moral  considerations,  as  indicating  the  nature 
and  amount  of  the  things  our  inherited  traits  lead  us  to 
desire.  These,  together,  account  for  the  aggregation  on 
our  soil  of  the  people  who,  among  themselves,  own  all  the 
instraments  of  production — land,  labor,  and  capital.  The 
motive-power  of  it  all  has  been  the  satisfaction  of  desires. 

The  answer  to  our  inquiry  required  neither  learning  nor 
philosophy.  The  only  question  was,  which  was  the  best 
way  for  these  men  to  act  under  certain  motives?  The 
reply  was  simply  an  account  of  what  they  did,  and  the 
reasons  why  they  acted  as  they  did.  If  resort  has  been 
made  to  the  technical  language  of  the  political  economist, 
it  has  been  because  the  common  unfamiliarity  with  it  has 
engendered  the  idea  that  there  was  some  occult  explanation 
not  accessible  to  mere  business-men.  We  need  take  no 
account  of  any  theory  which,  we  may  agree,  is  only  "  a  ra- 


392  PROTECTION    VS.   FREE  TRADE. 

tional  description  of  a  group  of  co-ordinated  facts  in  their 
sequence  and  relations." 

What  were  our  facts  ?  According  to  Franthn  and  Ham- 
ilton, tlie  opinion  of  the  whole  people  of  Pennsylvania,  as 
expressed  in  their  act  of  September  20,  1785,  and  of  the 
people  of  all  the  colonies — according  to  the  testimony  of 
Bancroft,  Hildreth,  Minot,  and  other  historians,  cited  in  the 
foregoing  pages,  and  many  others  who  might  be  cited,  the 
facts  were :  the  fanners,  the  lumbennen,  the  cai'penters,  the 
masons  and  day-laborers,  the  schoolmasters,  parsons,  and 
doctors  found  themselves  miable  to  procure  the  supplies  of 
manufactured  goods  which  their  "  opulence  "  entitled  them 
to  enjoy.  They  could  not  trade  off  their  kind  of  "  abun- 
dance "  for  these  "  sundry  articles."  Without  consulting 
Adam  Smith  or  Jean  Jacques  Rousseau,  by  common  con- 
sent they  said  to  certain  of  their  neighbors :  "  Yon  can 
make  just  the  things  we  need — our  cotton,  woolen,  and  iron 
fabrics.  You  make  them  for  us,  and  we  will  agree  to  buy 
them  of  you.  We  will  patronize  you.  Invest  your  money 
in  the  requisite  '  j)lant,'  and  we  will  see  that  you  are  remu- 
nerated for  your  capital  and  labor  on  the  common  terms 
which  our  joint  resources  will  allow.  We  will  trust  your 
skill  and  industry  for  results  in  cheapness.  We  will  go 
further.  So  that  neither  party  may  back  out,  we  will  put 
this  agreement  in  the  Constitution,  authorizing  Congress  to 
'  regulate  commerce '  to  this  end.  Of  course,  with  the  un- 
derstanding that  if  the  results  do  not  turn  out  best  for  a 
majority  of  us,  we  may  annul  this  arrangement  and  buy 
anywhere  in  the  world — have  free  trade.  Certain  doctri- 
naires are  abroad  who  want  these  goods  as  well  as  we,  but 
they  preach  '  liherty '  and  their  '  inalienable  rights '  of  '  ex- 
change ' — they  prefer  these  abstractions  to  the  commodities 
which  satisfy  our  and  their  desires.  We  prefer  the  com- 
modities.    ^Nevertheless,  you  take  your  chances,  that  we 


INDUSTRIAL  RESULTS   ACHIEVED.  393 

may  repudiate  the  present  understanding,  for  the  majority 
must  rule." 

This  is  all  there  ever  was  in  protection,  in  fact  or  in 
law.  It  was  a  balancing  of  the  expedients  open  to  them 
— to  enjoy  the  goods  or  go  without  them.  They  knew, 
then,  for  they  said  so  in  terms,  that  the  price  of  the  domes- 
tic goods  was  higher  for  the  moment  than  the  price  of  such 
foreign  goods  as  they  could  buy. 

Nor  did  they  trust  the  skill  and  industry  of  their  manu- 
facturing neighbors  in  vain,  for  the  domestic  goods,  if  the 
whole  supply  be  taken  into  the  account,  are  cheaper  now 
than  the  foreign.  The  results  have  turned  out  so  well  for 
all  of  us  that  the  compact  is  still  adhered  to. 

And  the  doctrinaire  is  still  abroad,  insisting  on  free 
trade  as  a  Tnode  of  his  liberty — still  talking  about  "  rob- 
bery "  and  "  spoliation,"  and  the  "  subtle  and  unjust  inva- 
sion of  his  rights,"  growing  out  of  this  agreement  of  the 
vast  majority  of  his  neighbors. .  The  "  force  "  he  denounces 
is  the  legitimate  force  of  the  societary  compact.  The  com- 
pact will  be  promptly  abrogated  when  it  ceases  to  work  the 
results  intended.  But  our  doctrinaire  cares  nothing  about 
economic  results.  He  risks  his  all  on  the  transcendental 
"  liberty "  he  claims  he  is  entitled  to.  Let  that  have  full 
play,  and  he  cares  not  whether  he  has  prosperity  or  adver- 
sity— satisfaction  of  desires  or  not — liberty  is  the  desire  he 
wishes  to  gratify,  the  rest  will  regulate  itself.  " Hence" 
he  concludes,  ^^  either  prosperity  in  a  free-trade  country., 
or  distress  in  a  protectionist  country,  is  fatal  to  protection- 
ism, while  distress  in  a  free-trade  country  or  prosperity 
in  a  protectionist  country  proves  nothing  against  free 
trade."  Why  ?  Because  the  economic  results  of  "  liberty  " 
are  to  be  accepted,  whether  good,  bad,  or  indifferent.  The 
results  of  "protection"  are  to  be  rejected,  even  though 
they  are  the  best  attainable,  because,  forsooth,  they  are 


394  PROTECTIOX    VS.   FREE   TRADE. 

"  adventitious."  "  Liberty  "  is  the  panacea  for  all  ills — just 
as  "  liberty  "  was  the  idol  enthroned  by  the  French  Revolu- 
tionists. "  Man,"  they  cried,  "  is  naturally  a  perfect  and 
solitary/  loTiole — the  will  of  the  lawgiver  has  transformed 
him  into  a  fraction  of  a  greater  wholeP  Unregulated 
liberty  is  license,  violence,  disintegration. 

The  argument  we  have  essayed  has  not  been  conducted 
on  this  view  of  the  individual  and  of  the  society  with 
which  he  has  necessary  relations.  We  started  out  with  a 
study  of  the  scientilic  validity  and  economic  operation  of 
defensive  duties  in  the  United  States.  We  have  traced 
them,  and  are  willing  to  submit  the  necessity  of  their  im- 
position and  results  to  the  test  of  observation  and  experi- 
ence. Abstract  rights  are  not  within  the  field  of  discus- 
sion ;  the  concrete  judgment  of  the  majority  of  American 
citizens  on  a  question  affecting  their  general  welfare  is  final 
and  conclusive  before  any  tribunal  to  which  an  appeal  can 
be  made. 

We  have  said  nothing  of  the  moral  and  educational  ef- 
fects of  protection,  or  the  economic  advantages  coming  from 
density  of  population,  and  its  relation  to  the  creation  of  fresh 
desires,  calUng  for  fresh  efforts  to  their  satisfaction.  l!^or 
have  we  discoursed  on  the  utter  helplessness  of  agiiculture 
itself,  when  unattended  with  the  other  arts  and  sciences. 
We  have  only  taken  the  free-trader's  premises,  the  power  of 
agriculture  to  effect  the  exchanges  needed.  We  have  dis- 
cussed it  from  the  low  elevation  of  the  exchange  of  material 
commodities,  and  that  on  the  sole  consideration  of  their  ae- 
cessibihty  and  cheapness — cheapness,  both  in  the  sense  of 
the  expenditure  of  labor  and  effort  upon  it,  and  the  money 
price — accessibility,  on  the  contemplation  of  other  sources 
of  supply.  The  free-trade  view  intrinsically  contains  in  it- 
self the  idea  that  what  we  want  is  "  leisure^''  and  the  tem- 
perament which  prescribes  that  we  save  labor  by  having 


INDUSTRIAL   RESULTS  ACHIEVED.  395 

fewer  desires  and  consequent  release  of  effort  to  gratify 
them.  It  is  unnecessary  to  encumber  our  discourse  with 
abstruse  speculation  on  the  subject.  We  are  not  the  kind 
of  people  which  that  philosophy  contemjilates.  We  do  not 
lead  fixed,  stationary  lives,  which  nm  in  rigid  grooves.  We 
are  a  j^rogressive  race — with  convolutions  in  our  brains 
which  expand,  and  sutures  in  our  skulls  which  allow  exj)an- 
sion.  We  have  never  ventured  to  try  the  experiment  of 
returning  to  fewer  and  coarser  desires,  but  our  whole  effort 
has  been  to  render  our  organization  more  sensitive,  our  pains 
and  pleasures  more  acute,  and  our  lives  more  energetic  in 
the  pursuit  of  means  by  which  we  might  secure  the  one 
and  avoid  the  other.  We  have  simply  surrendered  to  the 
law  of  our  nature  under  the  stimulation  of  om*  proper 
environment.  The  great  facts  of  our  environment  are  all 
contained  within  the  geographical  area  which  bounds  the 
nation.  The  actions  and  reactions  which  we  undergo  are 
the  actions  and  reactions  between  the  men  and  the  things 
which  are  common  to  us  as  the  inhabitants  of  a  given  ter- 
ritorial area,  the  social  forces  which  move  us  are  the  forces 
of  t/ie  society  of  which  we  are  component  parts,  and  not  a 
society  in  Europe  or  Asia ;  the  functions  which  we  dis- 
charge are  the  functions  of  the  organic  unit  to  which  we 
belong,  and  not  of  an  organism  of  which  we  are  not  mem- 
bers, on  some  other  continent ;  the  whole  of  which  we  are 
parts  is  the  American  Nation^  and  not  the  abstract  hu- 
manity which  cosmopolitanism  contemplates.  We  are  a 
great,  healthy,  independent  entity,  with  our  own  co-ordi- 
nated nervous  system,  subject  to  the  reflex  action  of  the 
external  world  which  surrounds  us,  amenable  to  the  sensa- 
tions which  our  adjustment  to  our  own  conditions  of  exist- 
ence has  generated.  We  have  no  conceivable  calculus  by 
which  we  could  estimate  the  loss  which  would  accrue  to 
us — the  cost — of  being  an  Esquimau,  and  subsisting  on 


396  PKOTECTIOX  VS.   FREE  TRADE. 

whale-oil,  or  a  Bornean,  living  on  bread-fruit.  "We,  there- 
fore, furnish  no  data  by  wliich  the  free-trader  can  use  us 
as  mere  counters  in  the  reckoning  of  the  gains  and  losses 
of  the  unworthy  and  insigniUcant  game  which  he  conceives 
us  as  playing.  And  thus  it  happens  that  when  the  free- 
trader has  fenced  us  in  by  his  definitions,  he  blurts  out  his 
protest  the  moment  the  true  inquiry  lands  us  outside  his 
inclosure — the  moment  you  trace  the  roots  of  his  science 
to  the  true  undergound  of  human  nature,  he  cries,  "  Halt ! " 
Prof.  Sumner  says  an  economic  problem  may  be  worked 
out  by  itseK.^  He  leads  us  up  to  the  border-land  where 
the  problem  begins  to  take  hold  of  vital  factors,  and  then 
wishes  us  to  solve  it  with  the  aid  of  the  few  tokens  he  has 
been  pleased  to  place  in  our  hands.  "With  a  given  lot  of 
commodities  made  and  in  hand,  ready  for  sale  by  all  the 
individuals  and  all  the  nations  of  the  earth,  he  wants  the 
trade  made,  the  swap  instantly  accomplished,  on  the  market 
prices  current  in  the  world  at  the  moment.  He  wants  the 
books  instantly  balanced  all  over  the  world  on  a  given  day. 
Each  man  trades  what  he  has  for  what  he  wants,  on  a  given 
signal,  with  no  thought  for  the  morrow.  "When  presented 
in  that  form,  it  is  soluble  "  by  itself."  Even  then,  we,  in 
the  United  States,  would  be  left  with  a  large  surplus  of 
unsalable  food  and  raw  materials  on  our  hands,  and  conse- 
quently would  not  get  what  we  wanted.  But,  when  we 
contemplate  the  morrow,  with  its  development  of  new  de- 
sires and  new  forms  of  consumption,  with  new  products 
and  new  forms  of  production,  and  that  these  are  the  desires 
of  Americans  and  the  products  of  Americans,  we  see  that 
it  is  a  question  of  sociology,  and  a  question  of  social  sci- 
ence— of  science  in  that  society  which  we  call  the  United 
States.  To  deal  with  the  situation  as  a  purely  economic 
one,  to  stop  and  palter  with  the  feeble  waves  wliich  break 

'  See  page  74,  supra. 


IXDUSTRIAL   RESULTS   ACHIEVED.  307 

along  the  beach,  is  to  ignore  the  massive  power  of  the  great 
ocean  itself. 

The  problem  which  is  presented  is,  therefore,  as  we 
have  seen,  over  and  over  again,  a  political,  social,  moral, 
rehgious,  as  weU  as  an  economical  one. 

If  we  had  confined  our  exertions  to  the  raising  of  food 
and  raw  materials,  with  the  needed  mechanism  of  such 
pursuits,  would  we  have  accumulated  the  material,  tools, 
and  instruments,  including  land  and  houses,  which  we  now 
have  ?  Manifestly  not.  Should  we  have  made  the  prog- 
ress we  now  have,  even  in  agriculture  ?  Probably  not. 
Would  a  McCormick  have  been  developed,  and  his  reaper, 
without  the  skill  and  genius  which  comes  of  the  attrition 
of  a  race  of  trained  artisans  ?  We  do  not,  of  course,  know, 
but  probably  not.  The  South  previous  to  the  war  has 
shown  us  what  the  rude  labor  needed  in  cotton-raising  can 
do,  and  what  it  can  accomplish  in  the  way  of  progress  and 
achievement.  It  is  no  answer  to  say  that  they  were  sub- 
ject to  the  conditions  of  slavery.  The  real  question  is, 
what  is  the  nature  of  the  requirements  needed  in  the  rais- 
ing of  cotton  ?  A  gold-mining  country  has  the  machinery, 
and  the  machinery  only,  required  in  that  business.  A  coal- 
mining country,  when  that  business  is  the  main  occupation, 
needs  only  the  machinery  appropriate  to  that  business,  and 
the  labor  peculiar  to  it ;  an  agricultural  people  will  come 
to  no  implements  not  indispensable  to  the  working  of  the 
soil.  In  the  presence  of  a  race  who  refuse  to  limit  their 
labors  to  that  pursuit,  we  have  developed  much  labor-sav- 
ing machinery  for  the  farmer ;  by  himself,  would  he  have 
done  it  ?  JSTone  of  us  can  do  more  than  guess — probably 
not.  What  we  are,  we  see  and  know;  what  we  might  have 
been  under  free  trade,  even  as  cotton  and  food  raisers,  is  a 
matter  of  idle  conjecture  and  poor  guess-work.  The  free- 
trader may  fairly  be  called  upon  to  construct  his  landscape 


398  PROTECTION    VS.   FREE   TRADE. 

under  a  regime  of  free  foreign  trade.  He  may  be  fairly 
challenged  to  estimate,  under  the  demands  of  a  foreign 
market  alone  for  our  surplus,  how  far  he  thinks  the  area  of 
arable  land  would  now  extend  westward  from  the  Alle- 
ghanies ;  how  he  imagines  the  sites  of  the  cities  of  Lowell, 
Troy,  Philadelphia,  Trenton,  Johnstown,  Pittsburg,  Cleve- 
land, Wheeling,  and  Chicago  would  look.  .  How  his  land- 
scape would  hold  out  in  churches,  and  school-houses,  and 
hospitals,  and  places  of  amusement ;  and  how  meager  and 
thin  would  the  census  be.  And  whether,  in  fact,  he  does 
not  know  that,  as  a  whole,  the  country  would  not  only  now 
be  better  off,  but  would  be  industrially  more  healthy  and 
more  "wealthy,"  if  under  wise  guidance  we  had  never 
raised  a  dollar's  worth  of  surplus  food  and  raw  material  ? 
AVhetlier  a  sagacious  manager  would  not  have  done  better, 
treating  the  land  as  a  food-factory,  to  have  produced  supply 
according  to  demand.  "Whether,  in  fact,  he  does  not  know 
that  the  loss  in  exchange  value  which  has  accrued  from  the 
vast  overproduction  engendered  under  liberty  would  not 
have  paid  the  cost  of  all  the  machinery  which  protective 
tariffs  have  enabled  our  people  to  erect.  Whether  he  does 
not  know  that  we  should  have  made  the  best  use  of  our  re- 
sources, and  should  have  shared  our  prosperity  on  a  higher 
level  with  each  other,  if  we  could  have  managed  to  con- 
duct our  industries  so  that  there  would  be  no  surplus — 
no  overproduction  anywhere.  These  propositions  are,  of 
course,  purely  speculative,  but  the  burden  is  upon  the  ad- 
vocate of  free  foreign  trade  to  answer  them.  He  complains 
of  existing  things ;  let  him  put  his  science  to  some  con- 
structive work,  and  exhibit  demonstrable  results.^ 

'  These  suggestions  are  put  interrogatively.  What  the  true  development 
of  the  subject-matter  of  them  demands  is  a  chapter  devoted  to  the  explicit 
proof,  which  is  possible,  that  without  manufactures  we  should  have  had  no 
agriculture.    As  it  has  been,  our  agriculture  was  wasteful,  and  extensive  rather 


INDUSTRIAL   RESULTS  ACHIEVED.  399 

So  intent  has  the  philosophical  free-trader  been  to  pre- 
serve the  status  bj  which  he  could  reach  up  and  pluck  his 
bread-fruit  without  effort  or  sacrifice — so  anxious  for  the 
"  leisure  "  which  he  thought  he  had  the  capacity  to  enjoy, 
but  had  not — so  persuaded  that  he  could  lead  the  life  and 
experience  the  sensuous  impressions  of  the  vertebrate,  con- 
sistently with  the  faculties  and  habits  and  "  cost  of  Kving  " 
of  the  mollusk,  that  he  really  overlooked  his  humanness — 
the  imperiousness  of  his  desires  and  his  marvelous  ability  to 
work  their  satisfaction.  The  mandate  of  the  Almighty,  to 
subdue  the  earth,  reached  the  ears  of  the  men  in  America — 
an  old  family  in  a  new  home.  They  had  all  the  accumulated 
experience  and  all  the  inherited  traditions  of  the  race.  You 
might  attempt  to  expsl  tlieir  American  human  nature  with 
a  pitchfork,  but  it  would  return.   The  mandate  meant  more 

than  intensive.  Wc  should  have  encountered,  without  the  domestic  manu- 
facture, the  danger  of  degeneration  in  our  whole  nature,  wants,  desires,  and 
aspirations,  and  of  the  total  collapse  of  our  career,  with  the  loss  of  hope  and 
power  to  recover  the  lost  groimd.  It  would  be  idle  to  attempt  any  real  pict- 
ure of  the  American  people  as  mere  farmers — food-raisers  for  foreign  capi- 
talists. The  free-trader  is  prompt  to  present  a  mere  dogmatic  denial  that 
they  would  accept  the  role,  but  certainly  his  philosophy  prescribes  that  they 
should  have  accepted  it,  and  he  fails  to  show  how  it  is  to  be  escaped. 

The  American  farmers  would  probably  present  a  new  type ;  their  inherent 
characteristics,  energy  of  soul,  intelligence,  and  manly  virtue,  would  have 
prevented  their  degeneration  to  the  level  of  producers  of  raw  materials  else- 
where. These  are  the  same  characteristics  which  have  prevented  their  ac- 
ceptance of  that  status  in  the  world's  economy,  and  which  have  insisted  on 
nobility  of  industry  and  pursuits,  under  the  machinery  of  protective  tariffs. 
They  would  constrain  them  to  do  the  same  thing  over  again,  if  their  history 
was  to  be  repeated.  They  had  strong  arms  to  do  the  rude  labor  required  in 
the  cultivation  of  their  fields.  But  their  historical  traditions  were  such  as  to 
make  social  considerations  an  ingredient  in  their  nature,  and  compel  them  to 
a  higher  education,  which,  as  rude  laborers,  would  not  have  paid  them.  One 
of  Bishop  Berkeley's  "  Queries  "  was,  "  whether  the  awaking  of  wants  is  not 
the  most  probable  way  to  lead  a  people  to  industry."  Our  ancestors  were 
bom  with  these  various  wants,  masterful  and  unappeasable,  except  by  com- 
plete satisfaction. 


400  mOTECTIOX    vs.   FREE   TRADE. 

to  them  than  to  run  plow-marks  across  their  fields  and  to 
resume  the  pastoral  life  which  their  predecessors  had  fol- 
lowed on  the  plains  of  Asia.  Subtlety  of  brain  furnished 
free  play  for  deftness  of  finger.  Their  divine  commission 
extended  to  earth,  and  air,  and  sea.  Elasticity  of  steam 
stood  for  human  muscles,  electricity  did  human  errands 
under  great  oceans,  and  man's  audacious  invention  dissolved 
the  stable  chemical  compounds  which  had  locked  up  the 
treasures  he  sought  in  dead  matter.  The  Promethean  fire 
had  been  wrested  from  the  sky.  Alone,  "  the  wants  of 
man  exceeded  his  powers  "  ;  aggregated  in  society,  "  man's 
powers  exceeded  his  wants."  Contemporaneous  with  the 
origin  of  the  nation,  began  the  triumphant  siege  which  the 
human  family  laid  against  the  obstacles  interposed  between 
nature  and  the  gratification  of  human  wants.  Engine  after 
engine  was  wrested  from  nature,  and  turned  into  mechanism 
which  carried  the  conquest  into  new  regions.  The  actual 
achievements  of  the  past  have  only  raised  us  into  tlie  view 
of  the  illimitable  sj)aces  yet  before  us.  The  satisfaction 
of  lower  wants  has  only  brought  us  into  the  presence  of 
unmeasured  higher  wants  which  come  trooping  in  upon  us. 
But,  in  the  mean  time,  and  as  the  result  of  the  process, 
vast  tracts  of  nature  lay  subdued  at  man's  feet.  The  pro- 
duction of  given  commodities,  under  the  progressive  effi- 
ciency of  human  skill,  called  for  a  less  and  less  onerous 
contribution  of  human  labor.  Utilities  increased  and 
values  diminished.  Yalues  diminished,  because  less  human 
effort  was  expended  in  surmounting  the  obstacles  which 
Nature  presented,  and  with  which  she  resisted  man's  ad- 
vances. Nature  herself  thwarted  his  purpose  to  be  a  jelly- 
fish, by  inflaming  him  with  new  desires  at  the  moment 
when,  having  planted  his  feet  on  the  means  of  satiating  old 
desires,  he  proposed  to  sit  down  for  "  leisure  " — for  a  regu- 
lar free-trade  dolce  far  niente — for  a  good  old  Patagonian 


INDUSTRIAL  RESULTS  ACHIEVED.  401 

industrial  nihilism}  Nature  flanked  us  at  last ;  her  old 
edict  still  operates :  by  the  sweat  of  liis  brow  shall  man  eat 
his  bread;  but  she  has  made  man  of  more  account  and 
greater  than  the  bread  he  eats. 

In  all  this  process,  then,  commodities  have  become 
cheaper  to  the  human  family  —  not  cheaper  to  some,  by 
the  temporary  and  fortuitous  circumstances  that  a  portion 
of  the  children  of  Adam  labor  and  strive  on  a  remunera- 
tion which  barely  supports  the  human  being  as  a  tool,  and 
that  some  are  able,  for  a  few  weeks  or  a  few  years,  to  ex- 
change a  few  gratuities  of  nature  with  their  overburdened 
and  overworked  fellows,  and  thus  make  good  economic 
bargains  out  of  them,  swap  a  little  rude  labor  of  the  hands 
for  much  travail  of  the  soul — but  cheaper  for  all  mankind, 
by  virtue  of  the  mighty  and  successful  assault  which  our 
humanity  has  inspired  and  enabled  us  to  make  against  the 
material  universe.  Shall  the  American,  with  the  divine 
equipment  with  which  he  is  invested,  remain  behind  in  this 
assault?  Armed  alike  in  body  and  soul,  shall  he  shirk 
heroic  duty  and  fail  of  heroic  rewards  by  staying  at  the 

'  "  There  is  immense  force,  apparently,  in  the  fallacy  that  we  want  '  in- 
dustries,' when  in  fact  we  want  goods  to  supply  our  needs ;  in  the  idea  that 
we  want  work,  when  in  fact  we  want  leisure.  We  are  trying  to  sustain  life 
on  the  face  of  the  earth,  and  we  find  it  hard  work.  All  our  discoveries  and 
inventions  have  for  their  object  to  make  it  easier;  that  is,  to  get  more  goods 
for  the  same  labor,  and  to  sustain  more  and  more  highly  developed  men.  For 
this  we  want  leisure  from  drudgery  as  the  first  and  most  imperative  requisite. 
Therefore,  everything  which  gets  the  goods  and  lessens  labor  is  an  advance  in 
civilization;  and  everything  which  makes  more  labor  necessary  to  get  the 
goods  tends  to  barbarism.  Labor  for  a  material  good  is  simply  a  gross  ne- 
cessity, which  we  are  all  the  time  trying  to  conquer  in  order  to  get  leisure  for 
pleasanter  and  higher  occupation ;  and,  above  all  else,  it  follows  that  those 
whose  lives  are  all  spent  in  drudgery  over  material  needs  are  most  clogged  in 
their  efforts  for  emancipation  by  everything  which  increases  labor.  Hence 
this  aim,  with  which  the  early  American  statesmen  set  out,  has  proved  a  chi- 
mera. The  further  we  follow  it,  the  further  it  leads  on.  We  get  more  in- 
dustry and  less  good." — Sumner,  "  Protection  in  the  United  States,"  p.  61. 


402  PROTECTION  VS.   FREE  TRADE. 

rear  and  playing  "  sutler,"  or  be  content  to  furnish  "  com- 
missary supplies  "  ?  We  may  thank  God  that  our  "  histori* 
cal  traditions  "  prevented  us  from  being  that  sort  of  men. 

Can  any  theologian  measure  the  gravity  of  our  sin,  had 
we  rejected  the  divine  message  to  subdue  the  earth,  and 
undertaken  to  evade  that  responsibility  to  a  Creator  which 
attaches  to  highly  endowed  creatures  ? 

Is  there  any  judicial  tribunal,  in  which  honor  or  fair 
play  sat  as  umpire,  which  would  withhold  condemnation  of 
the  act  of  a  people  whom  inertia  or  cowardice  inspired  to 
vacate  their  place  in  the  history  of  the  race,  which  this 
century  is  writing  ? 

Or,  on  the  low  level  of  the  free-trader,  is  there  any 
professor  who  can  reckon  up  the  immeasurable  economic 
gains  which  the  people  of  the  United  States  have  reaped 
by  virtue  of  the  entrance  of  American  artisans  upon  this 
great  warfare  against  nature  ?  Can  he  estimate  the  cheap- 
ness which  has  resulted  from  this  assault  and  conquest — ■ 
cheapness  to  ourselves  and  to  all  the  world?  Will  he 
attempt  to  deny  that  portion  of  man's  power  over  nature, 
which  the  efforts  of  the  American  skilled  laborer  and  in- 
ventor have  conferred,  in  the  act  of  adding  their  exertions 
to  those  of  their  worse-rewarded  but  struggling  brethren 
in  Europe  ?  Hour  by  hour  and  day  by  day,  the  price  of  com- 
modities has  been  reduced  by  the  mighty  co-operation  of 
all  men  everywhere.  The  momentum  of  the  attack  made 
on  our  soil,  and  with  our  natural  forces,  has  been  felt  along 
the  whole  hue.  The  whole  world  has  had  cheaper  iron 
and  steel,  cotton  and  woolen,  because  the  builders  of  Ameri- 
can furnaces  and  factories  have  achieved  distinct  improve- 
ments in  machinery  and  processes,  because  the  products  of 
American  furnaces  and  factories  have  been  thrown  into 
the  markets  of  the  world — been  made  available  for  the 
consumption  of  large  divisions  of  the  human  family.     This 


INDUSTRIAL  RESULTS  ACHIEVED.  403 

is  America's  contribution  to  the  civilization  of  the  world. 
It  matters  not  that  the  effort  has  been  to  supply  the  Ameri- 
can demand  by  America's  production.  The  efforts  have 
been  expended  here  on  the  best  natural  conditions.  The 
demands  we  should  have  made  on  England,  for  instance, 
for  iron,  have  been  withdrawn  to  the  advantage  of  the 
rest  of  the  world.  The  American  supply  now  equals  the 
American  demand.  Manufacturers  have  as  much  interest 
in  making  cheap  things  as  in  making  dear  things,  as  much 
interest  in  making  cheap  things  as  the  people  have  in  con- 
suming cheap  things.  The  price  is  an  index  of  our  power 
over  nature.  "What  the  world  wanted  was  the  new  thing, 
and  an  easy  way  to  get  it ;  and  not  the  price  of  it — that  de- 
pends on  the  hardness  of  the  way  to  get  it.  The  discovery 
of  the  new  want  of  railroads  has  called  upon  the  labor  and 
capital  of  the  world  in  the  last  forty  years  to  a  degree  in- 
capable of  estimation.  A  decided  proportion  of  the  efforts 
of  us  all  has  been  withdrawn  from  overcrowded  pursuits, 
and  has  been  directed  to  the  satisfaction  of  this  new  and 
pervading  desire  for  cheap  transportation,^  Does  the  free- 
trader argue  for  an  instant  that  rails,  steel  or  iron,  would 
have  been  as  cheap  as  they  are  now,  unless  American  brains 
and  muscle  and  money  had  co-operated  in  the  stupendous 
and  eager  effort  to  build  railroads  ?  Is  there  use  in  any 
debate  as  to  the  money  price  which  rails  would  have  borne, 
if  the  demands  of  all  the  world  had  been  made  upon  a 
limited  group  of  producers,  say,  in  Great  Britain?  Is  it 
not  manifest  that  every  pound  of  iron  or  steel,  and  every 
yard  of  cotton  or  woolen  goods,  produced  under  natural 
conditions  in  America,  has  operated  to  reduce  the  price  in 
all  the  markets  of  the  world — the  price  in  the  United 

'  It  is  believed  that  the  stoppage  of  work  on  the  railroad  system  of  the 
world — now  aggregating  350,000  miles — will  account  of  itself  for  the  depres- 
sion now  existing  in  all  industrial  nations. 


404  PROTECTION  VS.   FREE  TRADE. 

States  as  -well  as  elsewhere?  Is  it  not  evident  that  the 
protective  policy  which  induced  this  domestic  production 
was  a  wise  and  beneficent  scheme — in  the  interest  of  cheap- 
ness /  and  an  unavoidable  procedure,  if  on  American  soil, 
rather  than  foreign  soil,  the  activities  of  our  own  people 
were  to  be  diverted  into  this  channel,  and  swell  the  volume 
of  commodities  which  the  family  would  have,  available  for 
division  among  themselves  ?  What  is  the  sense  in  post- 
poning the  achievement  to  a  future  time  ?  Does  the  free- 
trader fear  there  are  no  more  worlds  to  conquer  ?  Doubt- 
less, if  we  had  not  done  it  this  century,  we  might  have  done 
it  the  next  century ;  but  we  wanted  the  raiboads  7ioio,  and 
we  wanted  them  with  sufficient  intensity  to  turn  to  and 
make  them  now.  We  wanted  those  "  509  steam-engines  " 
now.  Stop  and  look  deliberately  in  the  face  the  proposition 
that  America  was  to  buy  abroad — ^import  her  railroad  sys- 
tem of  125,000  miles,  and  its  equipment  of  iron  and  steel 
machinery!  If  it  was  worth  while  for  the  w^orld  to  have 
the  railroad  system,  it  was  worth  while  for  us  to  make  our 
share  of  it.  Why  not  ?  And  make  it  here,  at  home.  Why 
not  ?  We  could  not  have  imported  it  if  we  had  tried.  The 
welfare  of  that  portion  of  the  human  family  which  was 
here  was  greatly  increased,  and  it  greatly  increased  the 
numbers  who  came  here  to  participate.  Future  genera- 
tions must  discover  for  themselves  enough  of  "  something 
else  "  to  do.  Doubtless,  by  the  same  token,  if  the  colonists 
had  kept  away  from  this  continent  a  century  or  two  longer, 
future  generations  would  have  all  the  magnificent  forests 
along  the  Atlantic  seaboard  still  for  future  use.  Does  not 
the  free-trader  regret  the  economic  loss  which  we  have 
suffered  in  cutting  down  and  burning  np,  in  order  that  we 
might  make  arable  new  groimd,  the  millions  ^nd  millions 
of  pine  and  oak  trees  which  the  woodmen  of  America  have 
sacrificed  to  premature  cultivation?     Or,  rather,  ought  he 


INDUSTRIAL   RESULTS   ACUIEVED.  405 

not  see  and  regret  tliat,  by  our  insane  liaste  to  overproduce 
for  the  foreign  market,  we  have  been  guilty  of  the  earth- 
butchery  which  has  made  a  sterile  waste  of  the  Atlantic 
States  south  of  the  Potomac — has  robbed  the  Genesee 
Valley  of  its  eminence,  and  reduced  the  prairie-farms  of 
Illinois  to  an  average  wheat  crop  of  about  ten  bushels  to 
the  acre  ?  Was  not  this  an  economic  blunder — to  destroy 
so  ruthlessly  all  these  natural  instruments  of  production  ? 
The  result  of  all  which  was  to  skun  our  lands  of  riches 
and  bring  ourselves  earlier  under  the  unmitigated  dominion 
of  the  "law  of  diminishing  returns,"  to  which  all  agri- 
culture is  subject.  Desiring  to  know  why  the  inhabitants 
of  A^irginia  and  North  Carolina  may  now  be  found  in 
Texas  or  Arkansas,  the  answer  is,  "  They  borrowed  from 
the  earth,  but  they  did  not  repay,  and  she  expelled  them." 
Or,  on  another  line  of  considerations,  ought  he  not  to 
see  and  rejoice  that  the  protective  economy  has  enabled 
Prof.  Sumner,  for  instance,  to  escape  competition  with 
"  the  hedger  and  the  ditcher,"  because  it  has  created  a  so- 
ciety in  which  his  "services"  as  a  teacher^  were  in  de- 
mand, and  allowed  him  the  full  use  of  his  natural  advan- 
tages ?  An  economy  which  gave  the  society  the  "  serv- 
ices "  of  "  the  late  Mr.  Scott  in  running  a  railroad  "  instead 
of  keeping  him  in  competition  with  "  an  Irish  laborer  in 

*  If  we  should  take  Prof.  Sumner  at  his  word,  he  is  engaged  in  an  indus- 
try which  does  "not  pay."  Forgetting  his  economics,  and  speaking  as  a 
sociologist,  he  says  ("What  Social  Classes  owe  Each  Other"):  "There  is  a 
great  continent  to  be  subdued,  and  there  is  a  fertile  soil  available  to  labor, 
with  scarcely  any  need  of  capital.  Hence  the  people  who  have  strong  arms 
have  what  is  most  needed,  and,  if  it  were  not  for  social  considerations,  higher 
education  would  not  pai/." 

While  saving  Prof.  Sumner  and  the  late  Mr.  Scott,  we  have  also  saved 
millions  of  other  workmen  who  had  not  strong  arms,  but  did  have  inspired 
aptitudes.  Fortunately  for  the  Professor,  one  of  the  ingredients  in  the  "his- 
torical traditions  "  of  the  people  he  is  dealing  with,  made  "  social  considera- 
tions "  one  of  the  desires  to  be  satisfied.     And  this  is  outside  of  his  science. 


4,0Q  PROTECTION    VS.  FEEE   TRADE. 

digging  a  ditch  "  ?  "VVe  may  be  sure  that  the  society  of 
which  they  are  members  were  the  gainers  in  utilizing,  in 
appropriate  callings,  the  superiority  of  the  Professor  and 
the  organizer.  Imagine  the  wasteful  picture  of  Prof. 
Sumner  devoting  his  skill  to  driving  a  four-horse  team 
hitched  to  a  McCormick  reaper  on  a  wheat-factory  like  the 
Dalrymple  farm  in  Dakota;  and  Mr.  Scott,  seated  on  a 
broncho  pony,  frittering  away  his  marvelous  energies  on 
the  "  round-up  "  of  a  herd  of  Texas  steers,  for  export  to 
meet  the  foreign  demand  for  beef  !  ^ 

The  time  had  come  when  the  human  family  needed 
this  continent — and  they  needed  it  all — forests,  soil,  oreSj 
textiles,  cattle,  steam,  electricity.  The  development  re- 
quired the  skill,  effort,  and  sacrifice  of  the  men  who  were 
on  the  soil,  and  not  of  men  three  thousand  miles  away. 
The  society  was  to  be  built  up  here.  This  particular  army 
corps  was  encamped  on  the  arena  of  its  struggles.  It  as- 
sailed the  obstacles  on  its  own  front.  The  assault  involved 
all  arms  of  the  service.  Its  impetus  would  have  been 
weakened,  and  its  final  triumph  delayed,  had  it  made  any 
detachments  in  aid  of  the  struggles  going  on  elsewhere,  or 

'  "  If  it  is  said  that  we  can,  not  compete,  what  is  meant  ?  These  phrases 
are  allowed  to  pass  without  due  examination.  I  can  not  compete  wifh  my 
inferiors  or  with  my  superiors.  I  can  not  compete  with  an  Irish  laborer  at 
digging  a  ditch,  and  I  could  not  compete  with  the  late  Mr.  Scott  in  running 
a  railroad.  Could  any  taxes  enable  me  to  run  a  railroad  as  Mr.  Scott  did, 
and  to  earn  such  remuneration  as  he  earned  ?  Certainly  not.  No  taxes  can 
possibly  enable  a  man  to  compete  with  a  superior.  Could  any  taxes  enable 
me  to  compete  with  an  Irish  laborer  at  digging  a  ditch  ?  Indeed  they  could. 
They  might  interfere  between  me  and  the  laborer  and  prevent  me  from  getting 
Ilia  services,  and  /  might  be  forced  to  dig  my  own  ditch,  turning  away  from 
other  and  better  paid  occupations  to  give  my  time  to  an  inferior  occupation. 
That  would  impoverish  me.  Such  is  the  only  way  in  which  protective  taxea 
can  make  competition  possible.  They  drive  us  down  to  compete  with  those 
who  are  far  worse  off  than  we,  instead  of  allowing  us  the  full  use  of  our 
natural  advantages  "  / — Sumneu,  "  Tariff  Commission  Report,"  vol.  ii,  p.  10. 


INDUSTRIAL   RESULTS   ACHIEVED.  407 

left  beliind  important  numbers  to  struggle  with  harder  ob- 
stacles to  no  purpose.  The  ramparts  Jiave  been  carried,  its 
great  labors  have  been  done.  It  can  turn  and  look  at  the 
held  of  the  conflict.  The  conflict  is  past — it  has  been 
waged  "  once  for  all " — the  actual  problem  now  is  to  find 
new  wants  in  order  to  absorb  its  efforts.  AVe  turn,  then, 
to  new  conquests.  We  no  longer  ransack  our  resources  in 
exchange  values,  to  contrive  how  we  can  pay  for  an  im- 
portation of  twenty-four  thousand  tons  of  iron,  as  in  182-i-, 
at  eighty  dollars  per  ton.  We  need  about  five  miUion  tons 
annually,  and  can  make  it  ourselves  for  from  twelve  to 
fifteen  dollars  per  ton.  We  are  no  longer  compelled  to 
ease  off  a  too  sudden  desire  for  steel  rails  to  be  supplied 
from  England  at  a  cost  of  one  hundred  and  sixty  dollars 
per  ton.  We  can  produce  all  we  need  at  twenty-six  dollars 
per  ton.  Of  course,  English  and  German  and  French  skill 
has  helped  cheapen  production,  but  American  skill  has 
been  an  equal  factor,  and  present  prices  are  the  resultant 
of  adding  the  competition  of  American  labor  and  capital 
to  the  existing  industrial  organization  which  the  human 
family  had  set  up.  Free-traders  are  quite  apt  to  speak  of 
American  skill  as  bunghng — of  American  commercial  in- 
stincts as  dishonest ' — of  American  industrial  attempts  as 

'  One  scarcely  knows  whether  to  hold  the  master  or  the  pupil  responsible 
for  the  bad  morality  exhibited  in  the  following  passage,  taken  from  Prof. 
Perry's  "  Political  Economy,"  at  page  514  :  "  While  this  knit-goods  bill  was 
pending  (in  Congress,  in  18S2),  the  loriter  met  an  old  pupil,  a  manufacturer, 
and  asked  him,  '  What  are  you  running  on  now  ?  '  'On  these  knit  goods  they 
are  making  such  a  fuss  about  at  Washington.'  '  I  thought  you  spun  and 
wove  cotton.'  '  I  do.'  '  Are  not  knit  goods  woolen  ?  '  '  Xo.'  'Is  there  no 
wool  in  what  you  are  making  ? '  '  Not  a  shrecV  '  I  thought  this  bill  was  to 
protect  woolen  manufactures.'  '  Oh,  toe  arc  obliged  to  print  the  figure  of  a 
sheep  on  every  piece  ive  make,  but  every  fiber  of  it  is  cotton.^  " 

Now,  however  valuable  this  incident  might  be  as  the  basis  of  a  discourse 
in  criminal  jurisprudence,  it  is  rather  narrow  as  the  foundation  of  an  argu- 
ment against  protection. 


40S  PROTECTION  VS.   FREE  TRADE. 

if  they  were  an  "  abomination " — of  American  products 
as  if  they  were  coarse,  valueless,  worthless,  and  the  whole 
capital  and  labor  put  into  them  as  "  wasted "  and  "  frit- 
tered away."  There  is  no  end  of  praise  for  the  "  cheap 
and  nasty  "  products  of  foreign  shops.  A  man  who  con- 
tinues to  sit  on  the  top  rail  of  "  leisure,"  in  the  Sleepy 
Hollow  of  cheapness,  and  takes  no  note  of  this  grand  con- 
llict  between  human  forces  and  physical  conditions  on 
the  plains  above,  is  an  economic  idiot.  He  misconceives 
the  real  scope  of  the  problem  of  human  society — the  real 
motives  of  the  mundane  struggles  of  humanity — the  real 
outcome  of  our  earthly  efforts  and  sacrifices,  the  subjection 
of  Nature  by  turning  against  her  her  o%vn  enginery — the 
true,  final  issue,  cheapness. 

The  distributive  justice  which  is  realized  in  the  rewards 
and  remunerations  between  man  and  man,  between  group 
and  group,  is  administered  by  a  higher  power. 

In  what  degree  have  we  ourselves  profited  by  the  cheap- 
ness which  we  have  helped  to  bring  about  ?  Every  com- 
modity made  by  the  average  American  workman,  for  con- 
sumption in  the  average  American  household,  is  as  cheap, 
in  money  price,  as  anywhere  else  in  the  world.  The  cotton 
and  woolen  goods  the  average  American  citizen  wears,  the 
shoes  on  his  feet,  the  food  that  he  eats,  the  ordinary  crock- 
ery on  his  table,  the  carpets  on  his  floors,  the  utensils  used 
in  the  kitchen,  and  the  chains  and  plows  and  tools  used 
on  the  farm,  the  fuel  that  warms  his  house  and  cooks  his 
food,  the  fare  on  the  railroad  which  bears  him  on  the 
pleasure  excursion  or  to  distant  friends,  are  cheapened 
American  products,  and  could  not  be  imported,  tariff  or  no . 
tariff.  Some  exceedingly  fine  prints,  some  silks  and  velvets, 
some  decorated  china,  some  wines,  some  Ijric-d-hrac,  are 
imported  for  the  rich  or  fashionable  or  luxurious,  and  they 
properly  furnish  revenue  until   our  own  production  can 


INDUSTRIAL  RESULTS  ACHIEVED.  409 

take  these  forms.  A  visit  to  any  large  dry-goods  store  will 
show  many  articles  upon  the  manufacture  of  which  Amer- 
icans are  as  yet  unwilling  to  bestow  the  requisite  time,  or 
unable  to  expend  the  requisite  skill,  on  tenns  of  European 
compensation.  /  desire  to  rejpeat  it,  however,  that  all  the 
coinmodities  which  enter  into  the  consumjption  of  the  ordi- 
nal']/ toell-to-do  American  family  are  produced  here  at  no 
greater  cost  in  labor,  and  no  greater  average  price  in 
money,  than  anywhere  else  in  the  world}     In  all  the  great 

'  The  most  complete  attainable  statistics  of  wages  of  labor  and  cost  of 
living,  and  a  comparative  statement  of  these  as  between  Massachusetts  and 
Great  Britain,  will  be  found  in  the  "  Fifteenth  Annual  Report  of  the  Bureau 
of  Statistics  of  Labor,"  page  4G9,  issued  in  1884  by  the  Massachusetts  Bureau 
of  Labor,  and  compiled  by  Carroll  D.  Wright,  Esq.,  chief  of  the  bureau. 

The  report  states :  "  In  the  ninety  industries  in  Massachusetts  and  Great 
Britain,  supplying  statistics  of  average  weekly  wages  for  the  period  between 
the  years  1840  and  1883,  the  wages  of  at  least  one  and  a  quarter  million 
(1,250,000)  of  employes  are  represented." 

The  grand  comparison  gives  this  result,  as  to  wages ; 

"  That  the  gcnei-al  average  u'cekh/  wage  of  the  employes  in  the  industries 
considered  was  77-40  per  cent  higher  in  Massachusetts  than  in  Great  Britain." 

As  to  cost  of  living : 

"  77iaf,  on  any  basis  of  expenditure^  the  prices  of  articles  entering  into  the 
cost  of  living  were  on  the  average  17'29  per  cent  higher  in  Massachusetts,  in 
1S83,  than  in  Great  Britain  ;  that  of  this  figure  ll'Jjd  per  cent  was  due  to 
higher  rents  in  Massachusetts,  leaving  5'SO  per  cent  as  indicative  of  the  higher  \ 
cost  of  living  in  3lassachusetts,  as  compared  with  Great  Britain,  as  regards   \ 
the  remaining  elements  of  expense. 

"  The  Massachusetts  working-man  expends  48"41  per  cent  more  on  hia 
family  than  the  working-man  in  Great  Britain.  Of  this  4841  per  cent,  5-80 
per  cent  is  paid  extra  for  articles  which  could  be  purchased  5'80  per  cent 
cheaper  in  Great  Britain;  11"49  per  cent  is  paid  extra  to  secure  more  and 
larger  rooms  and  more  air-space  than  the  working-man  in  Great  Britain  en- 
joys; the  remainder,  31'12  per  cent,  indicates  also  an  extra  amount  expended 
by  the  Massachusetts  working-man  to  secure  better  home  surroundings,"  the 
better  and  more  furniture,  the  better  and  more  food,  the  better  and  more 
clothing,  etc.,  which  constitute  the  higher  standard  of  living  he  indulges, 
compared  with  the  working-man  in  Great  Britain. 

These  figures  lead  to  this  grand  result : 

"  Thai  the  higher  prices  in  Massachusetts  are  represented  by  5'SO  per  \ 


410  PROTECTION    VS.  FEEE  TRADE. 

fields  of  consumption  tlie  domestic  supply  is  nearly  equal 
to  the  domestic  demand.  In  these  departments  the  Ameri- 
can struggle,  under  defensive  duties,  has  worked  its  full 
results.  In  others,  success  is  just  in  view.  And  all  along 
the  line  definite  progress  is  being  made  in  the  direction  of 
cheapness,  and  the  full  supply  of  all  our  domestic  wants  by 
the  direct  act  of  domestic  production.^     That  is  all  there  is 

cent;  thai  increased  accommodations  in  housing  {W AS))  and  the  general 
HIGHER  STANDARD  OF  LIVING  (31"12)  maintained  by  Massachusetts  woi'king-men 
as  compared  with  the  stajidard  of  living  of  working-men  in  Great  Britain  is 
represented  by  42-61  (ir49  +  3112)  per  cent  of  the  total  greater  cost  (not 
higher)  of  48' 41  P^^  cent,  or,  stated  as  a  direct  ratio,  the  standard  of  living 
of  Massachusetts  working-men  is  to  that  of  the  working-men  of  Great 
Britain  as  142  to  1." 

'  "  There  are  named,  in  a  late  report  ('  Annual  Statements,  Treasury  De- 
partment, by  Counties  and  by  Customs'  Districts,  of  Imports  and  Exports  of 
the  United  States,  for  the  Fiscal  Year  ending  January  30, 1883 ')  by  the  Bureau 
of  Statistics,  112  classes  of  manufactured  products  that  are  imported.  But 
many  of  them  are  more  largely  exported,  showing  that  other  countries  de- 
pend on  us  for  such  products  more  than  we  depend  on  other  countries.  In 
less  than  one  fifth  of  these  classes  does  the  excess  of  imports  over  exports 
exceed  one  twentieth  part  of  the  home  consumption.  The  excess  in  cutlery, 
for  instance,  is  only  4  per  cent  of  the  consumption,  in  '  other  manufactures ' 
of  iron  only  3  per  cent,  in  lead  and  paints  each  3  per  cent,  and  in  carpets 
only  4  per  cent.  Practically  the  home  manufacture  supplies  the  whole  de- 
mand in  90  out  of  the  112  classes.  We  import  over  one  twentieth  of  the 
entire  consumption  in  only  22  classes,  viz. ;  cotton  goods,  lime,  and  glue, 
each  5  per  cent ;  steel  ingots,  and  ground  coffee  and  spices,  each  8  per  cent ; 
hair,  9  per  cent;  sauces  and  pickles,  10  per  cent;  woolen  goods,  11  per 
cent;  drugs  and  dyes,  12  per  cent;  zinc  and  books,  each  14  per  cent;  glass 
and  fancy  goods,  each  15  per  cent;  combs,  20  per  cent;  salt,  25  per  cent; 
earthen  and  stone  ware,  40  per  cent;  silk  goods,  43  per  cent;  miscellaneous 
forms  of  steel,  46  per  cent ;  buttons,  46  per  cent ;  flax  and  hemp  goods,  55 
per  cent ;  sheet-iron,  86  per  cent,  and  tin,  97  per  cent.  Only  three  out  of 
the  112  classes  are  supplied  more  largely  by  foreign  than  by  home  produc- 
tion. This  serves  to  show  how  few  branches  of  manufacture  there  are  that 
do  not  closely  approach  ability  to  supply  the  entire  home  demand.  With  a 
little  more  growth,  if  undisturbed,  nearly  all  will  command  the  home  market 
entirely,  and  by  competition  at  home  secure  as  low  prices  as  consumers  can 
reasonably  desire." — W.  M.  Grosvenok. 


INDUSTRIAL  RESULTS  ACHIEVED.  411 

of  it.  That  was  the  end  proposed,  and  the  only  end  pro- 
posed. Abundance  and  cheapness  are  the  only  economic 
ends  conceivable  to  which  human  exertions  can  legiti- 
mately be  directed.  There  have  been  blunders,  there  have 
been  miscalculations,  there  has  been  immaturity,  there  has 
been  vacillation,  there  have  been  ambitious  attempts  to 
scale  iu accessible  heights,  but,  on  the  whole,  it  may  be 
affirmed,  without  the  introduction  of  speculative  con- 
jectures, that  all  this  has  been  achieved  here  at  less 
waste,  at  less  friction,  at  less  miscarriage  of  effort,  at 
less  misdirection  of  energy,  at  fewer  false  steps,  at  lower 
outlay  of  capital,  at  less  expenditure  of  hard  woi'k,  than 
the  industrial  system  of  any  other  people.^  It  is  the 
best,  as  it  is  the  latest,  product  of  human  genius,  care,  adap- 
tation of  means  to  ends,  co-operation,  courage,  and  foresight. 
The  faculty  of  invention  by  which  we  turned  material  forces 
to  our  use,  we  have  seen  successfully  exercised  in  the  field 
of  social  forces,  through  the  intervention  of  the  Govern- 
ment, which  has  formulated  the  corporate  resolution  of  the 
people  to  supply  their  wants  from  their  own  resources. 
When  the  people  resolved  that  they  could  and  would  do 
all  these  things  for  themselves,  they,  at  that  moment,  im- 
posed a  protective  tariff  on  themselves.  So  favorable  were 
the  social,  political,  and  physical  conditions  in  the  [Juited 
States  that  they  reacted  on  the  economic  conditions.  Our 
industries  built  themselves,  just  as  the  Pacific  Railroad  was 
carried  across  the  continent  on  itself.  The  true  source  of 
our  effective  progress  was,  of  course,  the  material  condi- 
tions which  suiTounded  us,  and  in  the  nature  of  the  human 
agency  which  moved  us ;  but  the  true  results  were  possible 

'  In  the  midst  of  these  congratulations  it  is  only  proper  to  drop  a  note  of 
sympathy  for  the  anguish  of  certain  free-traders  who  are  persuaded  that 
somehow  protection  broke  down  in  the  presence  of  the  problems  of  emery, 
copper,  nickel,  and  spool-thread  I 


412  PROTECTION  VS.   FREE  TRADE. 

only  by  the  access  wliicL.  tLe  one  had  to  the  other ;  were 
accomplished  only  by  the  actual  application  of  the  one  to 
the  other.  It  looks  like  a  truism  to  say  that  our  resources 
could  only  become  utilized  on  the  condition  that  we  used 
them ;  but  the  free-trader,  by  implication,  denies  it.  The 
human  agent  was  drawn  to  this  field  of  employment  from 
the  four  ends  of  the  earth.  He  came  under  the  multiplied 
attractions  of  moral,  political,  material,  and  economic  ad- 
vantages. The  supply  of  labor  was  thus  secured.  The 
only  capital  required  was  the  subsistence  in  food  and  cloth- 
ing, consumed  by  labor,  while  the  great  operation  was  be- 
ing earned  forwai'd.  To  these  premises,  our  unquestioned 
successful  career  of  achievement  stood  in  the  relation  of  a 
true  propter  hoc,  and  no  cheap  fortuitous  j)ost  hoc.  The 
conclusion  was  contained  in  the  premises,  and  necessarily 
flowed  from  them. 

l!^or  was  the  local  prosperity  of  the  workers  in  this 
geographical  theatre  of  the  division  of  human  labor  the 
only  berieticent  result  of  American  endeavor.  The  West- 
ern republic  became  a  vent  for  the  overcrowded  labor 
of  all  Europe,  and  our  wages  withstood  the  terrible  in- 
flux ;  we  assimilated  even  the  garbage  dumped  upon  our 
shores.  The  workshops  of  England,  Germany,  Kussia,  and 
France  felt  the  relief  which  our  great  draft  made  upon 
them.  The  demand  we  made  for  labor  here  thinned  the 
ranks  of  competing  hands  and  brains  there.  Their  wages 
and  standards  of  living  rose  responsive  to  the  removal  of 
repressive  burdens  there.  The  general  level  of  welfare 
was  raised  through  all  the  world.  When  the  founders  of 
the  nation  invited  the  human  instriunents  of  production  to 
our  own  soil,  they  entered  into  an  imj^lied  contract  to  pro- 
vide opportunity  to  render  material  services  here — one  to 
the  other.  The  transfer  of  the  laborer  himself  took  the 
place  of  a  trade  in  the  products  of  liis  labor.     Glad  and 


INDUSTRIAL  RESULTS  ACIIIEYED.  413 

prosperous  as  tliiugs  became  here,  tliey  led  also  to  gladness 
and  prosperity  elsewhere.  The  places  in  Europe  made  va- 
cant by  the  seven  million  immigrants,  who  have  reached 
us  since  1800,  have  widened  the  margin  of  comfort  and 
enjoyment  of  every  laboring-man  and  his  family  in  every 
country  in  Europe.  The  human  family  has  been  the 
gainer  in  a  large  sense,  but  it  was  also  true,  all  this  time, 
that  we  kept  our  higher  rate  of  progress  by  entering  into 
possession  of  all  our  own  resources,  moral,  mental,  and  ma- 
terial. We  divided  on  a  higher  level  by  dividing  ^nth  each 
other.  "We  reaped  greater  economic  gains  by  plowing 
our  fields,  rather  than  by  plowing  the  ocean.  We  pock- 
eted all  the  profits  by  the  domestic  exchanges,  rather  than 
export  all  our  gratuities  in  the  illusive  rewards  of  foreign 
commerce.  We  have  retarded  our  descent  to  the  common 
level  of  rewards  for  labor  and  abstinence — wages  and  profits 
— which  seems  to  be  the  admitted  outcome  of  our  struggles, 
and  must  flow  from  the  improved  appliances  which  render 
labor  and  capital  mobile  over  large  areas  of  the  earth. 

The  American  experiment  has  added  incalculably,  di- 
rectly and  indirectly,  to  the  welfare  and  civiHzation  of  the 
whole  race — resulting  from  our  joint  contest  over  nature : 
for  the  others,  by  draining  them  of  surplus  laborers,  working 
at  disadvantage,  under  unproductive  conditions — by  giving 
them  a  chance  to  recover  their  courage,  their  esj^rit  de 
corps^  their  social  integrity — by  affording  them  an  example 
of  the  worth  of  man  and  the  dignity  of  labor ;  for  ourselves, 
by  dividing  among  ourselves  the  remunerations  for  hard 
and  skillful  toil  on  the  maxims  of  justice  and  equity,  and 
foregoing  the  silly  ambition  of  sending  our  products  in 
ships  all  over  the  world,  in  the  idle  expectation  that  we 
could  find  better  bargains  among  foreigners  than  among 
ourselves. 

So  signal  has  been  our  own  success  in  supplying  our 


414  PROTECTION  VS.   FREE  TRADE. 

own  wants  tliat  a  class  of  tlieoretical  free-traders  liave 
cliaiiged  their  -wliole  premises  and  tlieir  wliole  line  of  ar- 
gument within  the  last  few  years.  We  were  first  told  by 
the  professors  that  a  new  country  had  neither  tlie  labor  nor 
the  capital  to  carry  on  great  organized  industries ;  that  we 
must  wait  until  one  accumulated  and  the  other  multiplied, 
and  that,  "  when  competition  had  become  as  severe  here  as 
abroad,  industries  would  come  in  naturally  and  of  their 
own  accord  " ;  "  that  we  had  not  the  arts  and  sciences  and 
the  skill  of  older  nations ;  that  we  had  not  their  misery 
and  their  want,  and  that  the  advantages  and  disadvantages 
of  those  states  were  about  equally  divided,"  and  that  in  con- 
sequence we  must  "  take  to  the  land."  Protectionists  have 
thought  that  if  we  could  get  Natm-e  on  our  side,  and  get 
her  to  take  a  hand  in  our  interest,  the  sooner  we  appropri- 
ated her  services  the  better. 

Now  we  are  told  that  we  have  too  much  labor  and  capi- 
tal, and  that  we  must  reverse  the  currents  of  our  commerce. 
Let  us  see  how  this  school  go  about  it.  Mr,  David  A. 
Wells,  in  the  "  North  American  Review  "  for  September, 
188tl:,  says,  inie)"  alia : 

"  It  is  clear  that  there  is  no  need  whatever,  at  present, 
for  any  more  furnaces  or  factories  to  supply  any  domestic 
or  home  demand,  and  that,  if  even  the  existing  furnaces 
and  factories  are  to  be  kept  fully  employed,  and  any  con- 
struction of  new  ones  entered  upon,  a  larger  market,  or  a 
market  outside  of  the  country,  must  in  some  way  be  ob- 
tained." Then  he  deduces  certain  conclusions  which  he 
calls  "  axioms  "  : 

"  First.  There  is  no  sufficient  market  for  our  surplus 
agricultural  products  except  a  foreign  market,  and,  in  de- 
fault of  this,  such  surplus  will  either  be  not  raised,  or,  if 
raised,  will  rot  on  the  ground."  ^ 

•  Mr.  Wells  has  a  formidable  rival  in  rhetoric  and  a  dangerous  competitor 


INDUSTRIAL  RESULTS  ACUIEVED.  415 

"  Second.  The  domestic  demand  for  the  products  of  our 
existing  furnaces  and  factories  is  very  far  short  of  the  ca- 
pacity of  such  furnaces  and  factories  to  supply,  and  until 

in  logic  in  the  Hon.  Frank  Ilurd.  In  the  speech  by  the  last-named  gentle- 
man in  Congress,  before  referred  to,  he  says : 

"  It  must  not  be  forgotten,  as  I  said  a  while  ago,  this  wheat  finds  its  mar- 
ket in  Liverpool  in  competition  with  all  the  wheat  of  the  world.  The  price 
of  the  wheat  there  is  determined  by  the  competition.  This  competition  not 
only  fixes  the  price  of  the  wheat  sold  there,  but  of  every  bushel  sold  at 
home.  It  is  the  Liverpool  market  which  determines  the  price  of  wheat 
which  may  be  sold  at  Chicago,  Toledo,  Milwaukee,  or  any  of  the  great  grain 
centers  of  the  West. 

"  I  say  to  the  farmer  of  America  that  the  prospect  for  him  is  by  no  means 
encouraging.  With  elevators,  granaries,  and  warehouses  all  filled  to  over- 
flowing, with  the  old  crop  still  unsold,  with  the  vast  fields  of  the  great  West 
greening  to  the  coming  harvests,  with  crops  uncxceUed  in  India,  almost  ready 
for  the  market,  with  splendid  promise  among  almost  all  the  wlicat-growing 
nations  of  the  earth,  and  with  the  price  of  wheat  less  than  eighty  cents  in 
Chicago,  I  predict  that  before  January  next  the  price  of  wheat  will  be  so 
low  that  it  will  not  pay  the  cost  of  production,  and  the  corn  raised  on  the 
Western  prairies  wuU  be  burned  arjahi  for  fuel,  as  was  the  case  several  j-ears 
ago.  When  that  time  arrives  the  farmers  will  be  beggars  in  the  midst  of  their 
own  plenty,  and  paupers  by  the  side  of  their  own  golden  gathered  slieaves.  [Ap- 
plause.] There  is  absolutely  no  relief  to  the  American  farmer  except  in  the 
making  of  foreign  markets  for  him  "  ! 

That  is  to  say,  forsooth,  videlicet — i.  e.,  the  non  food-producers  of  the 
world  take  a  certain  amount  of  food,  the  market  price  of  which  is  fixed  at 
Mark  Lane,  London.  The  American  farmers,  in  competition  with  the  farmers 
of  all  the  world,  have  this  market  plu^  the  home  market  to  the  non-food- 
raisers  here.  Taken  as  a  whole,  the  price  of  wheat  is  so  low  "  that  it  will 
not  pay  the  cost  of  production."  Mr.  Hurd's  remedy :  abandon  the  ex- 
changes between  the  American  farmer  and  the  American  manufacturer; 
abandon  the  capital  and  labor  in  American  protected  industries,  and  turn 
them  upon  the  land. 

One  may  try  a  long  time  without  seeing  the  force  of  this  logic.  The 
American  artisan  will  be  glad  to  make  common  cause  with  the  farmer,  and 
their  joint  labors  will  supply  all  their  wants.  In  that  event,  it  is  not  appar- 
ent how  either  can  be  beggars  in  the  midst  of  their  own  plenty,  and  paupers 
by  the  side  of  their  own  golden  gathered  sheaves.  Mr.  Ilurd's  "  logic  "  fairly 
rises  into  the  region  of  humor. 


41 G  PROTECTIOX    VS.  FREE  TRADE. 

laro-er  and  more  extended  markets  are  attainable,  domestic 
competition,  while  not  preventing  large  sales  (for  a  nation  of 
fifty-six  millions  requires  a  large  amount  of  commodities), 
will  nevertheless  continue,  as  now,  to  reduce  profits  to  a 
minimum"  (as  protectionists  have  always  contended  it 
would),  "  and  greatly  restrict  the  extension  of  the  so-called 
manufacturing  industiies. 

"  Third.  AVith  restricted  opportunities  for  labor  and  the 
profitable  employment  of  capital,  the  continual  addition  to 
our  population  from  natural  increase  or  immigration  will 
inevitably  tend,  through  increased  competition,  to  reduce 
the  wages  of  labor  and  promote  social  discontent  and  an- 
tagonisms between  employers  and  employes." 

Concluding,  however,  from  a  general  review  of  our  sit- 
uation : 

"  But,  in  our  case,  whatever  has  happened  has,  as  yet, 
occasioned  no  scarcity  of  capital  for  every  fairly  promising 
investment." 

From  all  which  it  is  proposed  to  deduce  the  logical 
conclusions — abolish  all  protective  tariffs,  raise  more  food 
"  to  rot  on  the  ground  " — supplement  our  existing  furnaces 
and  factories,  and  relieve  the  increasing  competition  of 
laborers  here,  by  availmg  ourselves  of  the  "  services  "  of  all 
the  laborers  of  Euroj^e^  embodied  in  imported  commodities 
made  in  the  furnaces  and  factories  there. 

Indeed — • 

"  Here  is  a  pretty  mess, 
Here  is  a  state  of  things," 

revealed  by  this  Ivo-ko  of  political  economy. 

At  first  blush  it  would  seem,  admitting  Mr.  "Wells's 
axioms,  that  we  had  really,  through  tlie  contemned  and 
derided  protective  economy,  reached  the  opportunity  for 
the  "  leisure  "  so  eloquently  pleaded  for  by  Prof.  Sumner, 
only  he  wanted  to  enjoy  the  leisure  before  we  had  laid 


INDUSTRIAL  RESULTS  ACHIEVED.  41 7 

grounds  for  indulging  in  it — he  proposed  leisure  at  the  be- 
ginning, instead  of  at  the  end  of  an  industrial  career. 

Mr.  AVells  proposes  to  reverse  matters,  and  export  manu- 
factured commodities.  We  then  find  ourselves  confronted 
by  a  state  of  facts  the  operation  of  which  has  been  indicat- 
ed among  the  primary  laws  of  political  economy.  AVe  are 
remanded  to  the  fundamental  difficulty  pointed  out  by 
Alexander  Hamilton  (whose  writings,  by-the-way,  betray 
his  intimate  acquaintance  with  Adam  Smith's  "Wealth  of 
Nations  "),  to  "wnt,  "  The  vain  project  of  selling  everything 
and  buying  nothing."  AVe  are  called  upon  to  answer 
Prof.  Sumner's  query,  embodying  his  objection  to  starting 
in,  on  the  protective  system  at  all :  "  What,  then,  I  ask,  is 
the  rest  of  the  world  to  do  for  us  ?  If  we  take  all  the  in- 
dustries, how  will  they  pay  us  for  what  we  do  for  them  ? "  ^ 

'  Wc  here,  again,  encounter  the  eloquence  of  our  friend  Hon.  Frank 
Hurd : 

"  Last  year  England  sold  abroad  one  billion  five  hundred  million  dollars' 
worth  of  manufactured  goods,  and  America,  exclusive  of  the  manufactured 
products  of  agriculture,  sold  abroad  barely  seventy  million  dollars'  worth. 
Fifteen  hundred  millions  of  dollars  for  that  little  stormy  island,  and  seventy 
million  dollars  for  this  continent !  Yet  we  have  opportunities  and  advantages 
vastly  superior  to  hers.  She  has  to  go  thousands  of  feet  under  the  land  and 
under  the  sea  to  get  her  iron  and  her  coal,  and  go  thousands  of  miles  over 
the  land  and  the  sea  to  get  her  cotton  and  her  wool.  We  find  here  our  iron 
and  coal  close  to  the  surface,  on  the  mountains  and  hill-sides,  and  can  tumble 
them  together  into  the  furnaces.  We  have  the  vast  cotton-fields  of  the  sunny 
South  and  the  wide  pasture-fields  of  the  West  for  sheep  to  give  us  abun- 
dance of  cheap  cotton  and  cheap  wool.  It  is  an  ineffaceable  stain  on  the 
American  name  that  the  markets  of  the  world  have  thus  been  surrendered 
to  Great  Britain,  our  great  rival.  Think  you  that  if  we  could  have  sold 
abroad  of  our  manufactured  goods  one  billion  dollars'  worth  last  year,  there 
would  have  been  this  stagnation,  overproduction,  and  depression  ? 

"  If  I  could  burn  into  the  brains  of  the  manufacturers  of  America  one 
sentence,  it  would  be  this :  '  Turn  from  this  constant  introspection,  to  the  na- 
tions of  the  earth  ;  down  with  the  walls,  out  to  the  sea.'  There  are  2,000,- 
000,000  people  in  the  world  who  want  to  buy  what  you  make." 

Shutting  our  eyes  to  the  beauties  of  this  burst  of  rhetoric,  let  us  submit 


418  PROTECTION  VS.   FREE  TRADE. 

We  are  broiiglit  face  to  face  with  the  f onnulated  judg- 
ment of  approved  economists :  "  The  great  trades  of  the 
world  are  carried  on  between  countries  pretty  widely  re- 
moved from  each  other,  either  in  the  scale  of  civilization, 
or  in  respect  to  their  natural  resources  and  productions : 
while,  in  j^rojjortion  as  countries  ajyproximate  each  other 
in  natural  resources,  or  in  the  industrial  qualities  of  their 
inhabitants,  tlie  scope  for  international  trade  is  narrowed  ', 
it  is  even  possible  that  it  should  fail  altogether.  The  rea- 
son of  this  is  by  no  means  mysterious.  The  advantages 
to  be  derived  from  the  separation  of  employments  are,  in 
countries  in  which  industry  has  made  any  considerable 
progress,  in  general  realized  to  their  full  extent  hy  the  sepa- 
ration ivhich  taJhCS  place  within  the  limits  of  these  coun- 
tries.'''^    (Caimes,  "  Political  Economy,"  p.  300.) 

"  It  will  also  be  apparent,  that  nations p)0ssessing  exact- 
ly similar  powers  of  production  can  not  gain  hy  mutual 
commerce,  and  consequently  will  not  have  any  such  com- 
merce, however  free  from  artificial  restrictions^  (Jevons, 
"  Theoiy  of  Pohtical  Economy,"  p.  210.) 

"  This  is  so  strikingly  the  case,  that  the  growth  of  a 
nation's  foreign  trade  is  sometimes  vaguely  spoken  of  as 
though  it  constituted  absolute  and  unquestioned  evidence 
of  advance  in  industrial  prosperity.  It  may,  therefore,  be 
useful  to  point  out — what  might  otherwise  seem  too  ob- 
vious to  be  worth  stating — that  it  is,  cceteris  paribus,  an 
economic  disadvantage  that  any  commodity  should  be  pro- 
duced at  a  distance  from  the  market  in  which  it  is  nomi- 

it  to  a  little  logic.  Mr.  Hurd,  with  our  full  home  supply  of  food,  cotton, 
Avool,  coal,  iron,  silver,  gold,  copper,  and  most  raw  materials,  in  what  will  the 
2,000,000,000  ( ! )  people  of  the  world,  who  want  "  of  our  manufactured  goods 
one  hillion  dollars'  worth,"  pay  us  ?  Suppose  you  take  the  trouble  to  think 
this  over,  and  be  ready  with  a  specific  answer.  Really,  now,  what  do  you 
seriously  consider  to  be  the  reason  why  wc  don't  and  never  can  reach  them  ? 


I^^)USTRIAL  RESULTS  ACUIEVED.  419 

nallj  sold ;  and  that  if,  in  any  case,  tliis  disadvantage  can 
be  got  rid  of — without  creating  an  equally  serious  draw- 
back— through  tlie  production  at  home  of  some  commodity 
hitherto  imported  from  abroad,  tJie  j'esiilthig  diminution  of 
trade  would  obviously  he  a  mark  of  industrial  improve- 
ment and  not  of  retrogression ."  (Sidgwick,  "  Principles  of 
Political  Economy,"  p.  214.) 

"  The  noteworthy  circumstance  is,  that  while  the  coun- 
try was  then  prospering  "  (he  is  speaking  of  Australia)  "  its 
external  trade  was  undergoing  constant  contraction.  The 
fact,  I  may  mention  in  passing,  shows  how  little  the  foreign 
trade  of  a  country^  as  measured  hj  its  exports  and  imports^ 
furnishes  a  correct  criterion  of  its  industrial  progress  or 
growth  in  real  worthP  (Cairnes's  Essays :  "  The  Australian 
Episode."  ^) 

Let  us  see.  Here  in  the  United  States  is  a  people  with 
an  abundant  supply  of  ajjpropriated  capital,  with  an  ade- 
quate number  of  furnaces  and  factories,  ^v^th  a  surplus  of 
food  and  raw  materials,  with  all  the  cotton  and  woolen 
goods  they  need,  with  all  the  houses  to  cover  their  work- 
men, their  wives  and  childi-en,  with  the  blankets  on  their 
beds,  with  the  carpets  on  their  floors,  and  furniture,  with 
the  crockery  on  their  tables,  with  the  cooking  utensils  in 
their  kitchen,  with  all  the  iron  and  steel  they  can  use,  with 
railroads  to  carry  them  to  distant  fields  of  business  or  pleas- 
ure, with  literature,  with  churches,  with  places  of  amuse- 
ment ;  over  and  above  all  these,  capital  as  yet  uncommitted 
to  any  enterprise,  becoming  cheaper  and  cheaper,  and  only 
seeking  a  "  field  of  employment "  ;  labor  to  use  this  capital, 
with  constantly  increasing  productive  power  to  make  the 
more  and  multiplying  new  things,  which  vdll  eventually 

'  Every  economist  who  attempts  to  demonstrate  the  commercial  prosperity 
of  England  or  Holland  under  free  trade,  does  it  by  manipulation  of  her  cus- 
tom-house returns.  May  be,  for  British  progress,  this  is  the  test.  Certainly, 
we  in  the  United  States  can  better  measure  our  wealth  by  our  census  returns. 


420  PROTECTION    VS.  FREE   TRADE. 

be  divided  among  tlie  laborers.  All  tliis  is  going  along 
peacefully  under  tlie  law,  or  ratber  tbe  tendency,  wbich 
Prof.  Senior  more  fully  pointed  out,  tbat,  mider  tbe  in- 
creasmg  efficiency  of  tbe  co-operation  between  capital  and 
labor,  capital  is  getting  a  less  and  less  'projportionate  sbare 
of  tbe  product,  and  labor  is  getting  a  constantly  increasing 
jproportionate  sbare  of  tbe  joint  product.  Really,  tbis  is 
quite  as  optimistic  a  result  as  Carey  and  Bastiat  ever  antici- 
pated. It  is  a  fair  inquiry,  wbat  more  a  people  so  situated 
can  enjoy  ?  Any  foreign  commerce  wbicb  tbey  need  can 
only  be  for  tbe  products  of  otber  climates,  and  for  com- 
modities tbe  product  of  non-competing  groups  of  industries. 
And  it  is  tliis  commerce  witb  non-competing  industries 
wliicb  it  is  our  true  policy  to  build  up,  wbetber  witb  Soutb 
America,  Asia,  Africa,  or  Europe. 

On  sucb  a  commerce  tbere  will  be  no  restrictions.,  nor 
bave  we  ever  imposed  any.  We  sball  bave  time  and 
money,  also,  to  devote  to  tbe  one  outstanding  conquest 
wbicb  free  trade  bas  prevented  us  as  yet  from  essaying.  I 
say  free  trade  bas  prevented  us  from  essaying,  because  in 
tJie  carrying-trade  tbere  bas  been  no  attempt  to  impose 
restrictions,  except  as  to  our  coasting-trade.  Tbere  bas 
been  absolute  free  trade  in  freigbting.  Wbatever  may 
bave  bappened  to  our  sbip-owners,  by  reason  of  tbe  limita- 
tions imposed  on  buying  sbips  abroad,  our  ports  bave  been 
as  free,  in  ocean  carrying-trade.,  to  all  tbe  world  as  tbey  bave 
been  to  ourselves.  We  bave  been  driven  off  tbe  seas,  not 
by  tbe  tariff  on  sbips,  but  by  foreign  competition^  "  under 
freedom."  Doubtless  we  bave  been  able  to  do  better  witb 
our  capital  and  labor  in  providing  for  our  internal  com- 
munications, by  means  of  railroads  and  tbe  commerce  on 
our  rivers  and  lakes.  If  we  bad  bougbt  tbe  sbips  we  could 
not  bave  sailed  tbem.    Tbe  president  *  of  tbe  only  American 

'  Mr.  Henry  D.  Walsh,  of  Philadelphia. 


INDUSTRIAL  RESULTS  ACHIEVED.  4,21 

company  operating  a  line  of  steamers,  carrying  the  Ameri- 
can flag,  running  from  Philadelphia,  will  tell  you  that,  if 
their  steamers  were  presented  to  the  company  as  a  gift, 
they  could  not  be  profitably  enij)loyed  in  foreign  trade  in 
competition  with  the  salaries  and  wages  and  expenses  of 
English  oflicers  and  seamen.  "  At  the  time  of  the  repeal 
of  the  navigation  laws  all  the  best  judges  thought  that  the 
carrying- trade  of  the  world  must  pass  into  the  hands  of 
the  Americans.  It  has  jjassed  into  our  own.  There  are 
probably  several  causes  for  this ;  but  the  most  important, 
to  my  mind,  is  that  America  has  found  in  her  internal 
development — in  her  farming,  and  in  the  railways  which 
farming  creates  and  sustains — an  industry  more  profitable 
to  herself  and  to  the  world  than  the  ocean  carrying-trade." 
(T.  H.  Farrar,  "  Free  Trade  vs.  Fair  Trade.")  Free  trade 
in  freighting  has  driven  us  out  of  that  industry.  But  -we 
have  about  finished  our  system  of  internal  communica- 
tions. ]^o  people  can  do  everything  at  once.  Under 
proper  defensive  duties  we  are  again  about  to  enter  this 
great  field  of  employment,  at  present  unoccupied  by 
American  labor  and  capital.  We  shall  wrest  from  England 
a  portion  of  the  $500,000,000  annually  charged  the  nations 
of  the  earth  by  her  for  carrying  their  products  on  the  ocean. 
"VYe  shall  at  least  rid  ourselves  of  the  tax  which  this  opera- 
tion imposes  on  us.  The  issue  of  that  struggle  is  plainly 
foreshadowed  in  the  generous  words  of  Mr.  Gladstone,  in 
his  article  "  Kin  beyond  Sea,"  "  Korth  American  Review," 
September,  1878 : 

"I  do  not  speak  of  political  controversies  between 
them"  (the  thirty-eight  States  of  the  Union)  "and  us, 
which  are  happily,  as  I  trust,  at  an  end.  I  do  not  speak  of 
the  vast  contribution  which  from  year  to  year,  through  the 
operations  of  a  colossal  trade,  each  makes  to  the  wealth  and 
comfort  of  the  other,  nor  of  the  friendly  controversy  which 


422  PROTECTIOX    VS.   FFwEE   TRADE. 

in  its  own  place  it  miglit  be  well  to  raise  between  the  lean- 
ings of  America  to  protectionism,  and  tlie  more  daring  reli- 
ance of  the  old  country  upon  free  and  unrestricted  inter- 
course with  all  the  world.  JSTor  of  the  menace  which  in 
the  prospective  development  of  her  resources  America 
offers  to  the  commercial  pre-eminence  of  England.  On 
this  subject,  I  will  only  say  it  is  she  alone  who,  at  a  coming 
time,  can,  and  probably  will,  wrest  from  us  that  commercial 
supremacy.  We  have  no  title,  I  have  no  inclination,  to 
murmur  at  the  prospect.  If  she  acquires  it,  she  will  make 
the  acquisition  by  the  right  of  the  strongest,  but  in  this 
instance  the  strongest  means  the  best.  She  will  probably 
become  what  we  are  now,  the  head  servant  in  the  great 
household  of  the  world,  the  employer  of  all  employed,  be- 
cause her  service  will  be  the  most  and  ablest.  We  have 
no  more  title  against  her  than  Yenice  or  Genoa  or  Hol- 
land has  had  against  us.  One  great  duty  is  entailed  upon 
us,  which  we,  unfortunately,  neglect,  the  duty  of  prepar- 
ing, by  a  resolute  and  sturdy  effort,  to  reduce  our  public 
bm'dens,  in  preparation  for  a  day  when  we  shall  probably 
have  less  capacity  than  we  have  now  to  bear  them." 

I  hope  the  most  inveterate  and  obstinate  doctrinaire  in 
America  will  not  object  to  this  coming  era  of  universal 
free  trade,  based  on  the  United  States  as  the  economic  cen- 
ter of  the  world,  and  can  contemplate,  with  complacent 
satisfaction,  the  commerce  of  the  world  growing  by  con- 
centric layers  from  the  industrial  point  d'appui  which  our 
protectionism  has  established  here ;  and  may  take  pure  sci- 
entific comfort  in  the  fact  that  then  our  industrial  entity  and 
our  political  entity  may  be  separated  without  the  redistribu- 
tion of  our  capital  and  labor  throughout  the  planet.  "We 
are  to  become  the  center  of  gravity  for  terrestrial  exchanges. 

It  is  tolerably  obvious  that  this  grand  plan  of  exporting 
manufactured  goods,  which  free-trade  economists  now  hint 


INDUSTRIAL  RESULTS  ACHIEVED.  423 

at,  can  not  be  carried  out  if  we  destroy  tlie  manufactories 
themselves.  It  therefore  becomes  us,  in  view  of  present 
revenue  reform  scliemes,  to  explore  the  methods  proposed. 
Our  present  industries  have  been  organized  on  the  basis  of 
protection  in  the  past,  and  these  can  only  be  kept  in  pros- 
perity by  judicious  application  of  like  principles  in  the  fu- 
ture. Even  if  the  present  distribution  of  labor  and  capital 
is  an  artificial  one,  it  may  be  fatal  to  change  it.  If,  on  the 
contrary,  it  has  been  made  as  the  result  of  sound  economic 
doctrines,  any  changes  and  adjustments  ought  to  be  made 
by  statesmen  who  believe  in  the  validity  of  the  protective 
idea.  Mere  "tinkering"  with  the  tariff  by  doctrinaires 
would  be  intolerable.  And  surely  the  system  ought  not 
to  be  overthrown  unless  it  has  failed. 

1^0  w  the  logical  scientific  free-trader  will  be  found  at 
least  consistent.  Rejecting  in  toto  the  validity  of  protec- 
tion in  the  past,  or  prospectively,  he  would  at  once  proceed 
with  the  "  reform "  in  the  direction  of  free  trade — or,  at 
least,  for  a  "tariff  for  revenue  only,"  "adjusted  to  the 
needs  of  the  government  economically  administered."  It 
is  evident  enough  that  such  a  tariff  may  have  no  relation 
whatever  to  protection.  If  for  "revenue  only,"  duties 
should  be  levied  on  the  imports  of  commodities  which  we 
do  not  produce — a  "  protective  "  tariff  is  necessarily  levied 
upon  commodities  which  we  do  produce.^ 

Therefore  it  is  that  the  a  priori  free-traders  make  their 
attack  direct,  and  they  do  not  flinch  from  the  consequences 
of  their  doctrines.  Says  Prof.  Perry  ("  Political  Economy," 
page  510) : 

*  "  These  three,  then,  are  the  vital  principles  of  a  revenue  tariff,  namely, 
low  duties  on  few  articles,  and  these  icholly  foreign,  .  .  .  and,  therefore,  the 
three  vital  principles  of  protection  must  be  conceded  to  be  hiffli  duties  on 
many  kinds  of  goods,  the  eounterparts  of  which  are  made  or  grown  at  horned — 
Perry,  pp.  481-i84. 


424  PROTECTION    VS.  FREE  TRADE. 

"  The  suppressed  argumentation  is  sometliing  like  this  : 
Certain  tariff-taxes  are  now  a  part  of  the  law  of  the  land. 
Property  has  been  invested  in  -vdrtue  of  this  tariil  law; 
therefore  the  tax  must  be  touched  gingerly,  if  at  all.  The 
just  argument  would  take  this  form :  All  laws  hostile  to 
the  public  welfare  are  in  their  nature  void,  and  should  be 
at  once  repealed.  Protective  tariif-taxes  are  radically  in 
conflict  with  the  general  interests  of  the  j)eople ;  therefore 
such  taxes  should  be  at  once  repealed^ 

Prof.  Sumner  is  uncertain  whether  a  repeal  of  the  tariff 
laws  will  produce  any  inconvenience  at  all,  but  says  with 
confidence  : 

"  It  is  generally  assumed  that  it  will  be  wise  to  do  away 
with  the  system  gradually  and  slowly.  It  is  said  that  in- 
dustries will  receive  a  shock  or  be  destroyed  by  any  sudden 
action.  No  reason  for  these  assumptions  has  ever  been 
given,  and  they  are  not  found  in  any  facts  or  sound  rea- 
soning. On  the  contrary,  delay  in  the  process  of  reform 
would  produce  evils  that  would  be  avoided  if  the  change 
could  all  be  made  in  a  day.  The  period  of  transition  is 
the  one  of  hardship,  so  far  as  there  would  be  any  hard- 
ship ;  therefore  it  is  wise  policy  to  shorten  the  period  of 
transition  as  much  as  possible."  ^ 

If  the  principle  of  protection,  of  defensive  duties,  is 
to  be  abandoned,  these  gentlemen  are  right.     There  is  no 

*  Henry  J.  Philpot,  of  Des  Moines,  Iowa,  an  amateur  economist,  was  be- 
fore the  Tariff  Commission,  before  which  he  made  an  address.  He  repre- 
sented the  "  Iowa  State  Free-Trade  League."  In  the  course  of  his  examina- 
tion by  the  commission,  this  question  was  asked  and  tliis  answer  given  : 

"  Q.  Why  do  you  not  adopt  a  policy,  then,  of  letting  them  "  (the  protected 
industries)  "  down  at  once  ?  " 

A.  "  We  do  not  want  to  tear  them  down.  If  we  can  not  live  in  an  atmos- 
phere of  commercial  freedom,  then  I  say  for  myself,  and  I  know  that  I  repre- 
sent the  sentiments  of  thousands  of  people  in  Iowa,  let  them  come  down,  and 
the  quicker  the  better." 


INDUSTRIAL  RESULTS  ACHIEVED.  425 

use  in  delaying  with  "  horizontal "  scaling.  Whatever  in 
this  line  is  to  be  done  by  the  tarilf  reformers  had  better  be 
done  at  once ;  and  whatever  the  manufacturers  must  do,  in 
the  readjustment  they  will  undergo,  they  had  better  do 
at  once.  There  is  no  use  in  waiting  to  see  if  our  silk-fac- 
tories can  be  converted  into  rag-carpet  mills,  plenty  as  rags 
will  be,  or  if  our  iron-funiaces  may  not  be  changed  into 
creameries.  If  it  is  true  that  the  protected  industries  are 
"  unprofitable  "  and  "  sink  the  money  of  other  groups  of 
industries,"  they  ought  to  be  stopped  at  once.  If  their 
machinery  is  "  unproductive,"  it  is  not  '^  valuable  "  prop- 
erty, and  should  be  abandoned.  If  the  capital  invested  in 
them  is  "  worse  than  idle,"  it  should  be  withdrawn.  The 
whole  inventory  of  wealth  invested  in  them  is  worthless,  is 
naught,  and  may  as  well  be  wiped  off  the  national  ledger, 
charged  to  "  profit  and  loss,"  first  as  last. 

We  venture  to  assert  that  no  statesman  will  be  found, 
with  sufficient  confidence  in  the  abstract  deductions  of  the 
free-trade  economist,  to  thus  cavalierly  wipe  out  the  ma- 
chinery, the  capital,  and  the  laborers,  in  the  industries 
which  supply  $2,400,000,000  worth  of  the  commodities 
annually  consumed  by  the  people,  until  somebody  points  out 
some  other  source  of  supply  on  equally  advantageous  terms. 

The  case  is  in  a  nut-shell ;  first,  to  determine  upon  the 
end  sought,  then  the  appropriate  means  to  it.  The  social 
(or,  if  you  please,  the  self-seeking)  instincts  of  a  people  de- 
termine what  line  of  commercial  policies  is  best ;  having 
determined  that,  the  public  opinion,  embodied  in  legisla- 
tion, consolidates  the  forces  and  sends  them  through  a 
definite  structural  organization,  the  form  of  which  is  given 
by  the  statutory  enactment.  Otherwise  we  fall  back  on 
the  inane  doctrine  of  laissez  faire.  This,  as  we  have  seen, 
involves  an  oversight  of  the  distinctions  between  different 
forms  of  social  development  under  the  operation  of  the  in- 


426  PROTECTION  VS.   FREE  TRADE. 

ward  forces  of  society,  and  the  direction  wliicli  may  be 
given  them  by  the  intervention  of  tlie  governmental  decree 
— according  as  that  government  is  internal,  "  in  and  of  the 
people,"  embodying  their  judgment,  or  is  imposed  by  some 
external  power.  In  the  one  case,  the  interest  and  views  of 
the  supreme  dynastic  political  power  may  not  be  coincident 
with  the  real  interests  and  views  of  the  people;  in  the 
other,  the  social  development  is  free,  natural,  and  as  the 
people  wish  and  decree  it.  In  the  one  case,  will  be  evolved 
the  history  of  the  kings  of  England  or  France,  for  instance ; 
in  the  other,  the  history  of  the  people  of  the  United  States. 
In  the  one  case,  the  proverbial  sentiment  is  "  apres  nous  le 
deluge " ;  in  the  other,  the  struggle  is  for  the  earthly  im- 
mortality of  the  nation,  and  it  is  in  consequence  "  frequent- 
ly compelled  to  make  immediate  sacrifices  for  the  sake  of  a 
distant  future,  a  thing  which  can  never  be  to  the  private  in- 
terest of  the  mortal  individuals  who  compose  it."  (Roscher.) 
The  social  forces  which  issue  in  growth  of  an  indefinite 
form  may  be  made  to  assume  definite  form  by  human  con- 
trol. Every  law  for  establishing  common  schools  illus- 
trates this.  Men  can  exercise  their  teleological  faculties 
as  well  in  the  control  of  the  social  forces  as  in  the  control 
of  the  forces  of  the  material  world.  Prevision  and  design 
are  as  available  in  the  one  case  as  the  other.  We  make 
gravity,  steam,  and  electricity  operate  on  artificial  lines, 
and  take  them  oS  tlie  lines  they  would  naturally  have 
taken.  Our  success  depends  on  our  knowledge  of  the 
powers  we  are  dealing  with,  the  wisdom  of  the  end  we 
seek,  and  the  sagacity  of  our  application  of  means  to  an 
end.  The  end  must  be  definitely  apprehended,  wise,  and 
attainable.  Under  these  conditions,  invention  is  as  useful 
and  applicable  in  Iniman  society  and  government  as  in  the 
outer  physical  world.^ 

*  "  Society  is  simply  a  compound  organism,  whose  acts  exhibit  the  result- 


INDUSTRIAL  RESULTS  ACHIEVED.  427 

The  man  who  asserts  tliat  the  American  people  do  not 
clearly  apprehend  wliat  they  want,  are  incapable  of  adjust- 
ing means  to  the  end,  and  that  the  national  legislature  is 
wanting  in  the  wisdom,  sagacity,  and  honesty  to  provide 
the  necessary  statute,  assumes  the  burden  of  a  very  mighty 
responsibility.  The  only  other  alternative  is  to  fall  back 
on  laissez  faire,  a  barren  conservatism  which  can  only  re- 
sult, in  our  case,  in  a  stationary  existence  and  arrested  de- 
velopment. 

The  true  principles  of  protection  were  applied  in  the 
Tarilf  Act  of  1S16.  It  was  drawn  by  A.  J.  Dallas,  of 
Pennsylvania,  then  Secretary  of  the  Treasury.  He  divided 
the  im  portables  into  three  classes  : 

First.  Those  of  which  a  full  domestic  supply  could  be 
produced. 

Scco7id.  Those  of  which  only  a  partial  domestic  supply 
could  be  afforded. 

Third.  Those  produced  at  home  very  slightly  or  not 
at  all. 

ant  of  all  the  individual  forces  which  its  members  exert.  Those  acts, 
whether  individual  or  collective,  obey  fixed  laws.  Objectively  viewed,  society 
is  a  natural  object,  presenting  a  variety  of  complicated  movements  produced 
by  a  particular  class  of  natural  forces.  The  question  simply  is,  Can  man 
ever  control  these  forces  to  his  advantaf^e,  as  he  controls  other  and  some 
very  complicated  natural  forces  ?  Is  it  true  that  man  shall  ultimately  obtain 
the  dominion  of  the  whole  world  except  himself  ?  I  regard  society  and  the 
social  forces  as  constituting  just  as  much  a  legitimate  field  for  the  exercise  of 
human  ingenuity  as  do  the  various  material  substances  and  physical  forces. 
The  former  have  been  investigated  and  subjugated.  The  latter  are  still  pur- 
suing their  wild,  unbridled  course.  The  former  still  exist,  still  exhibit  their 
indestructible  dynamic  tendencies,  still  obey  the  laws  of  motion,  still  operate 
along  the  lines  of  least  resistance.  But  man,  by  tcleological  foresight,  has 
succeeded  in  harmonizing  these  lines  of  least  resistance  with  those  of  great- 
est advantage  to  himself.  .  .  .  Legislation  (I  use  the  term  in  its  most  general 
sense)  is  nothing  else  but  invention.  It  is  an  effort  so  to  control  the  forces 
of  a  state  as  to  secure  the  greatest  benefits  to  its  people." — Ward,  "  Dynamic 
Sociology,"  vol.  i,  p.  35. 


42  S  PROTECTION    VS.  FREE  TRADE. 

This  classification  is  a  good  and  safe  one  yet,  because  it 
scientifically  reaches  the  end  proposed. 

On  the  first  class,  duties  should  be  laid  heavy  enough 
to  secure  the  market  to  the  home  manufacturer,  leaving  it 
to  domestic  competition  to  keep  down  the  price. 

On  the  second  class,  the  duties  should  be  laid  so  as  to 
leave  the  door  open  to  foreign  competitors  and  yet  afford 
a  fair  protection  to  the  domestic  producers.  AVise  states- 
manship and  familiarity  with  our  resources  will  enable  any 
intelligent  statesman  to  adjust  the  duties  in  this  class  so  as 
to  afford  "revenue"  and  "  incidental  protection." 

On  the  third  class  the  duties,  so  far  as  jprotection  is  con- 
cerned, will  be  nothing  unless  revenue  considerations  in- 
tervene ;  the  protectionist  would  put  them  all  on  the  free 
list.  Whatever  duties  are  put  on  them  will  result  in  "  reve- 
nue only." 

It  is  not  to  be  disguised  that,  in  practice,  it  may  be 
difiicult  to  find  the  wisdom,  strength,  and  singleness  of  aim 
to  introduce  protection  only  so  far  as  it  is  advantageous  to 
the  community.  But  the  problem  is  no  more  insoluble 
than  any  other  one  involving  intelligence  and  honesty. 
Bearing  in  mind  that  the  purpose  of  j)rotection  is  to  enable 
domestic  producers  to  supply  the  domestic  demand,  protec- 
tion should  not  cease  until  that  end  is  reached.  When  it 
is  reached,  the  protective  statute  is  inoperative,  whether 
repealed  or  not.  The  only  practical  purpose  of  a  repeal  in 
terms  would  be  to  shut  the  mouths  of  tricky  economists 
and  to  silence  noisy  demagogues. 

See.    Consumers  may  rely  upon  two  sources  of  supply : 

First.  Upon  the  foreign  maker  and  foreign  market  for 
cheapness. 

Second.  Upon  a  second  and  independent  market  at 
home.  We  have  made  our  choice  of  the  latter,  by  nearly  a 
hundred  years  of  legislation. 


INDUSTRIAL  RESULTS  ACUIEVED.  429 

Two  distinct  modes  of  levying  duties  arise  : 

In  the  first  ease,  if  the  duty  does  not  give  tlie  home 
producer  a  cliance,  if  it  does  not  operate  to  create  a  second 
supply  for  the  consumer,  it  does  not  protect,  and  has  no 
business  to  exist,  except  for  revenue. 

In  the  second  ease,  if  the  duty  does  operate  to  give  the 
home  producer  a  living  chance,  in  spite  of  foreign  compe- 
tition, the  duty,  be  it  high  or  low,  is  protective. 

Mr.  William  M.  Grosvenor  has  condensed  these  con- 
siderations into  two  sentences : 

"  I.  The  consumer  suffers  if  a  revenue  duty  is  not  as  ^ 
low  as  possible,  to  yield  needed  revenue. 

"II.  The  consumer  suffers  if  a  protective  duty  is  not\ 
high  enough  to  build  up  a  home  supply  and  secure  ulti- 
mate cheapness." 

A  horizontal  reduction  all  around,  as  proposed  in  the 
Morrison  bill,  for  example,  has  no  justification,  whether 
revenue  ox  protection  be  the  end  sought.  For  revenue  only, 
it  imposes  a  higher  duty  than  is  needed.  For  protection,  it 
is  not  high  enough  to  save  the  home  producer.  The  dikes 
which  the  Hollanders  have  built  to  keep  out  the  sea  must 
be  high  enough  to  exclude  the  sea  at  the  highest  as  well  as 
at  the  lowest  tides. 

Our  present  tariff  is  levied  on  only  fifteen  schedules  or 
classes.  In  1880  the  imports,  both  dutiable  and  free,  were 
$650,019,979.  Of  this  amount,  $202,557,411  came  in  free 
of  duty.  The  total  amount  of  the  duty  collected  on  the 
remainder  was  $193,800,897.^ 

>  In  1882  the  net  income  of  Great  Britain  was  £71,945,000.     Of  this 
amount — 

Customs  duties  amounted  to £19,287,000 

Composed  of  duties  on  tobacco £8,800,000 

Wine  and  spirits 5,500,000 

Tea 4,000,000 

Currants,  raisins,  and  fruits  ...    500,000 


4-30  PROTECTION    VS.  FREE   TRADE. 

The  census  of  18S0  gave  tlie  total  product  of  our  manu- 
factures at  $5,369,667,706,  but  it  is  believed  to  be  nearer 
$8,000,000,000.  In  that  year  our  total  imports  were,  in 
round  numbers,  §600,000,000,  as  against  a  home  product 
of  $8,000,000,000,  more  than  thirteen  times  as  much.  But 
taking  the  census  figures,  the  home  product  under  each 
schedule,  according  to  which  duties  are  levied,  is  as  fol- 
lows :  ^ 

In  the  process  of  mining  anthracite  coal,  very  consid- 
erable quantities  of  the  strata  are  left  in,  in  the  form  of 
pillars,  for  the  support  of  the  surface,  and  the  towns  and 
cities  that  often  cover  it.  The  coal  thus  necessarily  left  is 
part  of  the  cost  of  mining  the  balance.  Occasionally  some 
reckless  operators,  thinking  the  coal  left  in  is  of  more  value 

Coffee,  cocoa,  and  cbiccory £300,000 

Beer 6,000 

All  other  articles 14,000 

These  "  customs  duties  "  on  imported  articles  are  offset  by  certain  "  excise 
taxes  "  on  like  articles  made  in  England.  These  excise  taxes  amounted  in 
1882,  on  spirits  produced,  £14,300,000 ;  beer,  £8,500,000;  wine  and  spirit 
licenses,  £1,800,000.  This  is  mainly  a  tariff  for  revenue  only.  It  is  easy 
enough  to  see  that  all  these  taxes  fall  on  the  laboring-man. 

Home  product  in  1880. 

'  Schedule  A,  chemicals $117,407,054 

"         B,  earthen  and  glass  ware 28,956,693 

"         C,  metals 604,553,460 

"         D,  woods 509,485,611 

"         E,  sugars 181,404,520 

"         r,  tobacco 118,665,366 

"         G,  provisions 1,036,572,580 

"         H,  liquors 142,122,048 

"         I,  cottons. 210,950,383 

"         J,flax 5,518,866 

"         K,  woolens 267,182,914 

"         L,  silk 41,033,045 

"         M  and  N,  sundries — paper,  etc 1,159,989,916 

Remainder 945,825,550 

$5,369,667,706 


INDUSTRIAL  RESULTS  ACHIEVED.  431 

tlian  the  surface  and  the  buildings  upon  it,  proceed  to  re- 
move so  many  of  the  pillars  as  they  dare.  This  process  is 
called  "  robbing  the  mine."  The  tariff  reformers,  who 
really  hate  the  industrial  system  reposing  on  tai'ijfs,  now 
propose  to  remove  the  supports  and  let  it  down.  They 
are  ])roceeding  to  "  rob  the  mine."  Statesmen  and  econ- 
omists who  believe  the  system  can  be  vindicated,  at  the 
cost  even  of  the  supports,  will  be  in  no  hurry  to  ingulf 
the  vast  wealth  thus  supported — especially  as  in  a  short 
time  it  is  manifest  that  it  will  be  self-supporting.  Except 
as  a  matter  of  form,  it  will  then  be  immaterial  whether 
they  are  left  in  or  not.  "  Robbing  the  mine  "  will  then  be 
harmless.  In  the  mean  time  it  is  unwise  as  it  is  unneces- 
sary to  remove  the  pillars. 

AVe  have  encountered  no  practical  disappointment  as 
yet  with  our  national  legislature.  A  commission  of  judi- 
cious, honest,  and  pure  men,  having  a  permanent  existence, 
with  no  private  purpose  in  view,  dealing  only  with  the 
economic  forces  in  play,  with  power  to  act,  would  be  a 
national  tribunal,  to  whose  decision  might  be  committed 
the  commercial  considerations  involved.  It  is  not  neces- 
sary that  Congress  should  undertake  to  enlighten  anybody's 
desire  for  profit.  Congress  itseK  is  enlightened  by  the  na- 
tional instinct  for  profit.  At  any  rate,  a  protectionist  will 
be  satisfied  if  Secretary  Dallas's  plan  is  honestly  carried  out. 

Tliis  is  not  exactly  the  place  to  suggest  a  tariff  bill. 
When  Prof.  Sumner  was  before  the  Tariff  Commission 
(''  Report,"  vol.  ii,  p.  2325)  he  was  asked  this  question : 
"  Suppose  the  present  tariff  was  wiped  out,  and  we  were 
to  follow  your  theory  of  letting  labor  seek  its  own  market, 
and  letting  the  products  of  labor  be  sold  wherever  they 
can  be  sold  at  the  highest  price,  regardless  of  a  tariff  or 
any  outside  consideration,  what  system  would  you  advise 
us  to  adopt  ? " 


432  PROTECTION  VS.    FREE  TRADE. 

The  answer  was : 

"  I  am  not  a  statesman  at  all ;  I  can  not  formulate  a 
revenue  system  for  the  country.  I  have  never  taken  such 
a  matter  upon  me ;  it  is  quite  out  of  my  line." 

Illustrations  may,  nevertheless,  be  given  of  the  applica- 
tion of  the  principles  our  discussion  has  led  up  to.^ 

'  Van  Buren  Denslow,  LL.  D.,  of  Chicago,  has  submiUed  the  laws  of  the 
incidence  of  customs  duties  as  follows.  These  laws  are  correctly  deduced 
from  observation: 

"  1.  No  duty  can  be  protective  unless  there  is  some  domestic  production 
of  the  commodity  on  which  it  rests,  nor  unless  the  domestic  supply  is  inade- 
quate to  fill  the  domestic  demand.  For  instance,  a  duty  ou  coffee  would  not 
be  protective,  because  there  is  no  domestic  production  of  it.  The  duty  on 
cotton  or  wheat  is  not  protective,  because  the  domestic  production  is  more 
than  adequate  to  supply  the  demand. 

"  2.  In  the  case  of  every  really  protective  duty,  therefore,  there  is  a  do- 
mestic production  which  the  duty  Is  constantly  stimulating  into  a  condition 
more  nearly  approximating  to  that  of  fully  supplying  the  demand.  Hence, 
in  the  case  of  every  really  protective  duty,  the  foreign  price,  with  duty  added, 
ceases  to  be  the  criterion  for  fixing  the  American  price,  for  the  latter  is  being 
constantly  more  and  more  determined  by  a  new  factor,  viz.,  the  competition 
and  cost  of  production  among  American  producers.  Thus,  for  several  years 
the  American  demand  for  steel  rails  was  so  great  that  America  developed  a 
capacity  of  production  greater  than  that  of  England  before  the  price  began 
to  fall  under  the  influence  of  American  competition  between  producers ;  but 
America  reached  a  capacity  of  producing  1,500,000  tons,  and  our  demand 
was  only  1,100,000  tons  ;  the  price  fell  to  $40,  though  the  foreign  price,  with 
freight  and  duty  added,  would  have  been  $52. 

"  3.  In  the  ratio  that  American  production  becomes  competent  to  supply 
the  American  demand,  the  price  ceases  to  be  in  any  manner  affected  by  the 
duty.  It  depends  on  American  cost  of  production  only.  For  instance,  there 
are  cotton  prints  now  selling  in  America  for  four  and  a  half  cents  a  yard,  and 
which  we  export  to  China  and  all  African  and  South  American  ports  in  com. 
petition  with  English  prints  selling  at  the  same  price.  On  the  importation 
of  these  cotton  prints  there  is  a  duty  of  five  cents  per  yard.  They  are,  there- 
fore, not  importable.  But  the  duty  forms  no  element  whatever  in  the  price, 
because  American  competition  produces  the  prints  as  cheaply  as  English 
competition. 

"4.  Hence,  the  improbability  that  the  price  of  an  American  manufacture 
is  affected  by  the  duty  at  all  increases  as  the  American  supply  becomes  ade- 


INDUSTRIAL   RESULTS  ACHIEVED.  433 

Eaw  materials  of  manufactures  for  wliicli  tliere  is  only 
partial  domestic  supply  may  be  free.  If  we  had,  for  in- 
stance, no  iron-ores  in  tbis  country,  or  not  sutficient  to  sup- 
ply the  demand  of  "Bessemer"  steel-works,  sucb  a  raw 

quate  to  fill  the  American  demand,  and  when  we  see  the  American  article  going 
abroad  as  an  export,  that  fact  becomes  conclusive  proof  that,  whether  a  duty 
rests  on  the  article  or  not,  its  price  is  as  low  in  America  as  in  England  or 
any  other  part  of  the  world.  Yet  Prof.  Perry,  in  addressing  an  Iowa  au- 
dience, told  them  that  a  returned  missionary  had  told  him  that  paper  was 
cheaper  in  Natal,  South  Africa,  than  in  the  United  States,  and  he  argued,  of 
course,  that  the  dearness  was  caused  by  the  duty.  Had  he  looked  at  our 
commerce  reports,  he  would  have  seen  that  we  ship  paper  to  South  Africa,  and 
that  the  missionary  was  as  likely  to  have  used  American  as  English  paper 
while  at  Natal. 

"  5.  In  strange  obliviousness  of  all  these  principles  concerning  prices,  it 
is  the  constant  habit  of  free-trade  theorists  to  charge  that  the  greater  the 
domestic  production  on  any  protected  article  the  greater  the  '  tax '  upon  the 
people,  since  in  all  cases  the  whole  amount  of  the  domestic  product  is,  they 
say,  raised  in  price  by  the  amount  of  the  tax,  whereas  the  fact  is  that  the 
greater  the  domestic  production  the  more  difficult  it  is  to  raise  the  price  in 
the  least  degree  by  any  duty  that  can  be  laid  upon  It ;  because  at  the  least 
rise  in  price,  though  it  be  by  only  one  tenth  of  the  duty,  the  domestic  pro- 
duction expands  in  quantity,  and  so  prevents  absolutely  a  further  rise  in 
price.  Thus,  in  my  judgment,  the  wool  that  was  protected  by  a  duty  of 
thirteen  cents  a  pound  can  be  demonstrated  to  have  sold  during  three  years 
past  at  not  more  than  three  cents  a  pound  higher  than  the  foreign  price  of 
wools  of  similar  quaUty,  because  American  wool-growers,  producing  nine 
tenths  of  the  American  supply  (and  those  of  them  who  produced  it  in  Texas 
and  the  Territories,  produced  it  nearly  as  cheaply  as  it  could  be  produced  in 
Australia),  had  too  much  to  sell  to  admit  of  the  American  price  rising  to  the 
foreign  price  with  duty  added. 

"6.  When  the  American  supply  is  wholly  or  nearly  adequate  to  the 
American  demand,  it  may,  nevertheless,  happen  that  the  article  will  be  im- 
ported, notwithstanding  the  American  price  is  no  higher  than  the  foreign. 
In  every  such  case  the  foreigner  either  divides  the  duty  with  the  American 
consumer  or  pays  it  all.  I  hold  it  to  be  demonstrable  that  about  $35,000,000 
of  our  customs  I'cvenue  are  in  this  manner  paid  by  foreigners,  and  are  not  a 
tax  on  the  American  consumer  at  all. 

"  Such  are  the  duties  on  wool  and  a  share  of  those  on  woolen  goods,  the 
whole  duty  on  lumber,  coal,  wheat,  barley,  rye,  and  other  agricultural  prod- 
ucts, including  rice,  part  of  the  duties  on  cottons,  and  lately  on  silks,  much 
20 


434  PROTECTION  VS.   FREE  TRADE. 

material,  tbongli  teclinically  iron-ore,  slioiild  be  duty  free, 
for  it  is  really  a  distinct  kind  of  commodity.  If  any  one 
knows  a  "  raw  material "  not  now  on  tlie  free  list,  let  him 
name  it  and  put  it  on  the  free  list. 

If  the  demand  of  the  country  for  sugar  were  to  be  sup- 
plied from  the  cane,  a  duty  on  cane-sugar  could  not  be  pro- 
tective— that  is,  it  is  a  semi-tropical  product,  and  the  domes- 
tic demand  could  not  be  supplied  from  the  home  product. 
Sugar,  therefore,  should  be  on  the  free  list,  unless  it  was 
decreed  a  proper  subject  of  taxation  for  "  revenue  only." 

If  the  entire  demand  for  wool  could  be  supplied  at 
home,  it  affords  a  subject  for  the  application  of  a  protect- 
ive tax.  If  there  are  special  kinds  of  wool  of  which  there 
is  no  expectation  of  full  home  supply,  that  is  a  distinct 
commodity  and  is  a  proper  subject  for  the  free  list. 

A  duty  on  wheat,  or  coal,^  or  iron-ore,  or  lumber,  or 
cotton,  or  watches,  would  not  be  protective,  because  the 
domestic  production  supplies  the  domestic  demand.  The 
price  is  made  here,  and  the  duty  imposed  would  fall  on  the 
importer  and  not  on  the  consumer. 

of  the  duties  on  cultery,  iron-ore,  crude  iron,  earthenware,  and  nearly  every 
competing  article. 

"  Briefly  stated,  then,  the  most  important  law  concerning  the  incidence  of 
a  customs  duty  is  that  no  duty  can  enhance  the  price  of  any  article  of  which 
the  country  is  producing  an  adequate  supply ;  nor  can  any  duty  raise  the 
price  in  favor  of  producers  without  setting  producers  into  competition  with 
each  other,  which  competition  constantly  tends  to  reduce  the  price  to  the 
lowest  one  at  which  its  production  can  be  maintained.  Hence  a  protective 
duty,  once  properly  and  wisely  laid,  never  needs  repeal  any  more  than  a  fort 
once  wisely  built  needs  tearing  down.  Its  only  effective  repeal,  considered 
as  a  tax,  is  the  reduction  in  prices  effected  by  its  operation.  The  repeal  of 
the  duty  after  this  reduction  in  prices  is  effected  is  an  idle  and  needless  cere- 
mony. The  repeal  of  the  duty  before  this  reduction  in  prices  ensues  is  a 
war  upon  the  domestic  production  before  it  is  ripe  for  the  foreign  competi- 
tion." 

'  For  a  very  satisfactory  demonstration  of  this,  see  a  monograph,  "  The 
Duty  on  Coal,"  by  Israel  W.  Morris,  Esq.,  Philadelphia,  IS'72. 


INDUSTRIAL  RESULTS  ACUIEVED.  435 

A  duty  on  tea  or  coffee  or  tropical  fruits  would  not  be 
protective,  because  there  is  no  domestic  production,  and  the 
duty  all  goes  into  the  Treasury. 

A  duty  on  the  products  of  comiyeting  industries  abroad 
operates  partly  for  revenue  and  partly  as  protection.  In 
the  majority  of  instances  the  price  of  the  foreign  com- 
modity is  not  increased  by  the  full  amount  of  the  protect- 
ive duty,  because  American  competition  reduces  the  home 
cost. 

"Whenever  the  American  production  in  such  industries 
reaches  the  American  demand,  the  price  ceases  in  any  man- 
ner to  be  affected  by  the  protective  duty,  for  the  reason 
that  the  cost  of  production  under  American  conditions  set- 
tles the  market  price.  In  the  latter  case,  if  the  article  is 
imported,  the  foreign  producer  pays  the  whole  duty,  or  at 
best  divides  it  with  the  home  consumer,  and  the  tax  goes 
into  the  national  Treasury.  Prof.  Henry  Sidgwick,  in  his 
"  Principles  of  Political  Economy,"  at  page  491,  very  neatly 
demonstrates  this  with  the  remark  that  "  a  simple  case  will 
show  how  a  duty  may  at  once  protect  the  native  manufact- 
urer adequately  and  recoup  the  country  for  the  expense 
of  protecting  him." 

These  illustrations  exhibit  the  interplay  of  the  forces 
involved.  If  we  may  rely  with  any  confidence  on  the  com- 
mon sense,  skill,  honesty,  and  productive  energies  of  the 
American  people,  in  the  future  as  we  have  in  the  past,  to 
make  what  they  can  and  buy  what  they  must,  we  may  safely 
leave  the  whole  case  in  their  hands  under  the  fostering  care 
and  protective  shield  of  defensive  duties.  The  nearer  ive 
come  to  organizing  and  conducting  our  competing  indus- 
tries as  if  we  were  the  only  nation  on  the  planet,  the  more 
we  shall  ma^e,  and  the  more  we  shall  have  to  divide  among 
the  makers. 

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the  utmost  care — a  care  which  extended  in  some  instances  to  special  6ur\'eys.  to 
insure  perfect  accuracy  in  the  descriptions,"— 2>r.  C.  K.  Adams's  Manual  o/HiS' 
torical  Literature. 


New  York:  D.  APPLETOX  &  CO.,  1,  3,  &  5  Bond  Street. 


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HISTORY  OF  ENGLAND,  from  the  Accession  of  James  II.  By 
Lord  T.  B.  Macaulay.  With  Steel  Portrait.  5  vols.,  I'imo.  Cloth, 
per  set,  $5.00;  sheep,  $7.50;  half  calf,  $15.00. 

"Uncioiibtedly  the  mo?t  brilliant  and  the  most  popniar  history  ever  written  in 
the  English  language.  It  shows  vast  research,  extraordinary  power  in  the  por- 
traiture of  individual  character,  and  a  literary  ukill  that  is  uuiivaled.'" — br.  (J.  K. 
Adams's  Manual  of  Histc/rical  Littrature. 

DIGEST   OF  ANCIENT   AND   MODERN    HISTORY.      By 

Thomas  Dew.     8vo.     Cloth,  $2.20. 

"So  nearly  what  its  title  indicates  that  any  considerable  description  is  un- 
necessary. In  method,  however,  it  is  somewhat  unusual.  Each  ]iaia<j;raph  be- 
gins with  a  question,  which  it  is  the  purpose  of  the  paragraph  to  answer." — Dr. 
C  K.  Adams's  Manual  of  Historical  Literature. 

MANUAL  OF  ANCIENT  AND  MODERN  HISTORY.     By 

W.  C.  Taylor,  LL.  D.,  M.  R.  A.  S.     Revised  by  C.  S.  Henky,  D.  D. 

8vo.     Cloth,  $3.50 ;  or,  in  separate  volumes,  $2.00  each. 
Ancient  IIistort. — Containing  the  Political  History,  Geographical  PoPi- 

tion,  and  Social  State  of  the  Principal  Nations  of  Antiquity,  carefully 

digested  from  the  Ancient  Writers,  and  illustrated  by  the  Discoveries 

of  Modern  Scholars  and  Travelers. 
Modern  History. — Containing  the  Rise  and  Progress  of  the  Principal 

European  Nations,  their  Political  History,  and  the  Changes  in  their 

Social   Condition ;     with   a   History   of    the   Colonies    founded   by 

Europeans. 

Dryness  is  generally  characteristic  of  condensed  historical  outlines  ;  in  the 
present  case  it  is  avoided  by  the  vigorous  style  of  the  author,  and  the  introduc- 
tion of  interesting  anecdotes  and  episodes  that  serve  to  relieve  the  mind,  and 
bring  out  in  clcarlight  the  peculiarities  of  individual  or  national  character. 

The  American  edition  has  been  revised  throughout  by  Dr.  Henry,  and  en- 
larged by  tue  introduction  of  an  admirable  chapter  on  American  history. 

HISTORY  OF  THE  JEWS  FROM  420  B.  C.  E.  TO  THE 
YEAR  70  C.  E.  By  Morris  J.  Kaphall.  2  vols.  12mo. 
Cloth,  $1.00. 

HISTORY  OF  THE  MIDDLE  AGES.  By  A.  L.  Kceppen. 
2  vols.     12mo.     Cloth,  $3.00. 

This  tnily  excellent  work  supplies,  in  a  very  satisfactory  manner,  a  want 
long  felt  by  every  student  of  history.  It  is  concise  in  style,  comprehensive  in 
matter,  lucid  in  arrangement,  and  full  of  ripe  scholarship  and  research. 

'■  The  author's  purpose  was  to  present  an  accurate  description  of  the  world 
daring  the  different  periods  from  the  ultimate  division  of  the  Koman  Empire, 
down  to  the  conquest  of  Constantinople  in  the  East,  and  the  discovery  of  Amer- 
ica in  the  West.  He  has  made  ample  use  of  the  best  geographical  authorities, 
and  has  broui;ht  together  a  vast  amount  of  minute  information  on  subjects  that 
are  often  very  obscure." — Dr.  U.  K.  Adams's  Manual  of  Historical  Literature. 


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HISTORY  OF  CIVIIilZATION  IN  ENGLAND.      By  Eknry 

Thomas  Buckle.  2  vols.  8vo.  (Jloth,  $1.0U;  hall' calf,  extra,  $8.00. 
"Whoever  misses  reading,'  this  book  will  miss  reading  what  is,  in  various 
respects,  to  the  best  ot  our  jud[,MUfiit  aud  experience,  the  most  n^narkable  book 
of  the  day— one,  indeed,  that  no  thouglitl'ul.  inquiring  mind  would  miss  reading 
for  a  good  deal.  Let  the  reader  he  as  adverse  as  he  may  be  to  the  writers  phi- 
losophy, let  him  be  as  devoted  to  the  obsiruciive  as  Mr.  Buckle  is  to  the  progress 
party,  let  him  be  as  orthodox  in  church  creed  as  the  other  is  heterodox,  as  dog- 
matic as  the  author  is  skeptical— let  him,  in  short,  find  his  prejudices  shocked 
at  every  turn  of  the  argument,  and  all  his  prepossessions  whistled  down  the 
wind— still,  there  is  so  much  in  this  extraordinary  volume  to  stimulate  reflection 
and  excite  to  inquiry,  and  provoke  to  earnest  investigation,  perhaps  (to  this  or 
that  reader)  on  a  truck  hitherto  untrodden,  and  across  the  virgin  toil  of  untilltd 
fields,  fresh  woods  and  pastures  new,  that  we  may  fairly  defy  the  most  hostile 
spirit,  the  most  mistrustful  and  least  sympathetic,  to  read  it  through  without  be- 
inir  glad  of  having  done  so,  or  havinL'  begun  it,  or  even  glanced  at  almost  any  one 
of  its  pages,  to  pass  it  away  unread."— i\%w  Monthly  Magazine  (.Loudon). 

THE  ENGLISH  CONSTITUTION,  AND  OTHER  POLITICAL 
ESSAYS.  By  Walter  Bageiiot.  Latest  revised  edition.  Contain- 
ing Essays  on  the  Characters  of  Lord  Brougham  and  Sir  Robert 
Peel,  Bart.,  never  before  published  in  this  country.  With  an  Amer- 
ican Preface.     12mo.     Cloth,  $2.00. 

"  A  work  that  deserves  to  be  widely  and  familiarly  known.  Its  title,  however, 
is  so  little  suggestive  of  its  real  character,  and  is  so  certain  to  repel  and  mislead 
American  readers,  that  some  prefatory  words  may  be  useful  for  the  correction  of 
erroneous  impressions.  It  is  well  known  that  the  term  '  Constitution,'  in  its 
political  sense,  has  very  different  significations  in  England  and  in  this  country. 
With  us  it  means  a  written  instrument.  The  English  have  no  such  written  docu- 
ment. By  the  national  Constitution  they  mean  their  actual  social  and  political 
order— the  whole  body  of  laws,  usaires,  and  precedents,  which  have  been  in- 
herited from  former  generations,  and  by  which  the  practice  of  government  is 
regulated.  A  work  upon  the  English  Constitution,  therefore,  brings  us  naturally 
to  the  direct  consideration  of  the  structure  and  practical  working  of  English 
political  institutions  and  social  life.  Mr.  Bagehot  is  not  so  much  a  partisan  or  an 
advocate  as  a  cool  philosophical  inquirer,  with  large  knowledge,  clear  insight, 
independent  opinions,  and  great  freedom  from  the  bias  of  what  he  terms  'that 
territorial  sectarianism  called  patriotism.'  Taking  np  in  succession  the  Cabinet, 
the  Monarchy,  the  House  of  Lords,  the  House  of  Commons,  he  considers  them 
in  what  may  be  called  their  dynamical  inter-actions,  and  in  relation  to  the 
habits,  traditions,  culture,  and  character  of  the  English  people.  We  doubt  if 
there  is  any  other  volume  so  useful  for  our  countrymen  to  peruse  before  visiting 
England."— .f/'om  the  American  Preface. 

HISTORY  OF  EUROPEAN  MORAL!?  FROM  AUGUS- 
TUS TO  CHARLEMAGNE.  By  William  E.  H.  Leckt. 
2  vols.     12mo.     Cloth,  $3.00;  half  calf,  extra,  $7.00. 

"So  vast  is  the  field  Mr.  Lecky  introduces  ns  to,  so  varied  and  extensive  the 
information  he  has  collected  in  it,  fetching  it  from  far  beyond  the  limits  of  liis 
professed  subject,  that  it  is  impossible  in  any  moderate  space  to  do  more  than 
indicate  the  line  he  follows.  .  .  .  The  work  is  a  valuable  contribution  to  oar 
higher  English  literature,  as  well  as  an  admirable  siiide  for  those  who  may  care 
to  go  in  person  to  the  distant  fountains  from  which  Mr.  Lecky  has  drawn  for 
them  so  freely." — London  Times. 


New  York:  D.  APPLETON  &  CO.,  1,  3,  &  5  Bond  Street. 


D.  APPLETON  &  CO.'S  PUBLICATIONS. 

A   HISTORY    OF    ENGLAND    IN    THE    EIGHTEENTH 
CENTURY.      By  William  E.  H.  Lecrt,  author  of  "History  of 
the  Kise  and  Influence  of  the  Spirit  of  Rationalism  in  Europe,"  etc. 
Vols.  I,  II,  III,  and  IV.     Large  12mo.     Cloth,  $2.25  each ;  half  calf, 
$4.50  each. 
"  On  every  ground  which  should  render  a  history  of  eighteenth -century  Eng- 
land precious  to  thinking  men,  Mr.  Lecky's  work  may  be  commended.      Tlie 
materials  accumulated  in  these  volumes  attest  an  industry  more  strenuous  and 
compreheuBive  than  that  exhibited  by  Froude  or  by  Macaiilay.    But  it  is  his 
Bupreme  merit  that  lie  leaves  on  the  reader's  mind  a  conviction  that  he  not  only 
possesses  the  acuteness  whicli  can  discern  the  truth,  but  the  unflinching  purpose 
of  truth-telling."— i^'^ew  To7'kSun. 

"Lecky  has  not  chosen  to  deal  with  events  in  chronological  order,  nor  does 
he  present  the  details  of  personal,  party,  or  military  affairs.  The  work  is  rather 
an  attempt  "to  disengage  from  the  great  mass  of  facts  those  which  relate  to  the 
permnrent  forces  of  the  nation,  or  which  indicate  some  of  the  more  enduring 
features  of  national  life.'  The  author's  manner  has  led  him  to  treat  of  the  power 
of  monarchy,  aristocracy,  and  democracy;  of  the  history  of  political  ideas  ;  of 
manners  and  of  beliefs,  as  Avell  as  of  the  increasins  power  of  Parliament  and  of 
the  press,"— i*/*.  C.  K.  Adams's  Manual  of  Historical  Literature. 

HISTORY  OF  THE  RISE  AND  INFLUENCE  OF  THE 
SPIRIT  OF  RATIONALISM  IN  EUROPE.  By  Will- 
iam E.  H.  Lecky.  2  vols.  Small  Svo.  Cloth,  $4.00;  half  calf, 
extra,  $8.00. 

"The  author  defines  his  purpose  as  an  attempt  to  trace  that  spirit  which 
'leads  men  on  all  occasions  to  subordinate  dogmatic  theology  to  the  dictates  of 
reason  and  of  conscience,  and,  as  a  necessary  consequence,  to  restrict  its  influ- 
ence upon  life'— which  predisposes  men,  in  history,  to  attribute  all  kinds  of 
phenomena  to  natural  rather  than  miraculous  causes  ;  in  theology,  to  esteem 
Bucceeding  systems  the  expressions  of  the  wants  and  aspirations  of  that  religions 
sentiment  which  is  planted  in  all  men ;  and,  in  ethics,  to  regard  ae  duties  only 
those  which  conscience  reveals  to  be  such."— i?r.  C.  K.  Adams's  Manual  of 
Historical  Literature. 

THE    LEADERS   OF   PUBLIC   OPINION  IN  IRELAND: 

SWIFT,  FLOOD,  GRATTAN,  O'CONNELL.     By  Will- 

lAM  E.  H.  Lecky.     12mo.     Cloth,  $1.75. 

"A  writer  of  Lecky's  mind,  with  his  rich  imagination,  his  fine  ability  to  ap- 
preciate imagination  in  others,  and  his  disposition  to  be  himself  an  orator  upon 
the  written  page,  could  hardly  have  found  a  period  in  British  history  more  har- 
monious with  his  literary  style  than  that  which  witnessed  the  rise,  the  ripering, 
and  the  fall  of  the  four  men  whose  impress  upon  the  development  of  the 
national  spirit  of  Ireland  was  not  limited  by  the  local  questions  whose  discussion 
constituted  their  fame."— J^'(^w  York  Evening  Post. 

HISTORY  OF  HENRY  THE  FIFTH  :  KIXG  OF  ENGLAND, 
LORD  OF  IRELAND,  AND  HEIR  OF  FRANCE.  By  George  M. 
TOWLE.     8vo.     Cloth,  $2.50. 


New  York :  D.  APPLETON  &  CO.,  1,  8,  &  5  Bond  Street. 


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RISE  AND  PROGRESS  OF  THE  ENGLISU  CONSTITU- 
TION.    By  Sir  Edward  S.  Cueasy.     12mo.     Cloth,  $1.50. 

A  very  interesting  subject,  treated  with  crcat  learning  find  skill.  It  phould 
take  its  |)lace  in  all  libraries  as  a  most  useful  commentary  on  EiiL'lish  liistury. 
As  an  account  of  the  gradual  development  of  tree  institutions  in  H;nglan<l,  it  con- 
nects itself  with  our  own  history,  especially  with  the  prof^reBB  of  opiuiou  iu  the 
early  part  of  our  lievoliitionary  etrujjijle. 

"As  a  manual  for  the  use  of  the  historical  student  while  he  is  laying  the 
foundation  for  a  knowledge  of  the  English  Constitution,  this  little  book  is  with- 
out a  superior.  It  combines  accuracy  with  vivacity,  and  should  be  constantly 
used  by  the  student  in  the  early  period  of  his  studies."— Z/'r.  C.  K.  Adams' t 
Manual  0/  Historical  Literature. 

A  CHILD'S  HISTORY  OF  ENGLAND.  Ey  Charles  Dickens. 
New  llousehold  Edition.  With  Illustrations.  Square  8vo.  Paper, 
75  cents;  cloth,  $1.25. 

THE  ENGLISH  REFORiHATION :  HOW  IT  CAME  ABOUT, 
AND  WHY  WE  SHOULD  UPHOLD  IT.  By  Cunningham  Geikie, 
D.D.,  author  of  "The  Life  and  Words  of  Christ."  12ino.  Cloth, 
$2.00. 

"Dr.  Geikie's  work  sustains  the  reputation  which  his  'Life  and  Words'  liad 
piven  him  as  a  clear  historical  writer.  It  is  impossible  to  comprehend  the  con- 
flicts for  spiritual  liberty  of  the  present  without  tracing  them  back  to  their 
origin  in  the  past ;  and  tfiere  is  no  single  volume  which  will  better  enable  us  to 
do  this  than  Dr.  Geikie's  'History  of  the  Lnj^lish  Reformation.' " — ]\'€W  York 
Christian  Union. 

"His  grouping  of  facts  is  often  masterly,  his  style  is  bold  and  incisive,  and 
hia  sketches  of  eventful  periods  or  eminent  personages  are  vivid  and  graphic." 
—Harpers  A'eic  Monthly  Magazine. 

ANECDOTAL  HISTORY  OF  THE  BRITISH  PARLIA- 
MENT. From  the  Earliest  Periods  to  the  Present  Time,  with 
Notices  of  Eminent  Parliamentary  Men  and  Examples  of  their  Ora- 
tory.    Compiled  by  G.  H.  Jennings.     Crown  8vo.     Cloth,  $2.50. 

"  As  pleasant  a  companion  for  the  leisure  hours  of  a  studious  and  thoughtful 
man  as  anything  in  book-shape  since  Selden." — London  Telegraph. 

"It  would  be  sheer 'affectation  to  deny  the  fascination  exercised  by  the 
'Anecdotal  History  of  Parliament.'  " — Saturday  Review. 

YOUNG  IRELAND  :   A  FRAGMENT  OF  IRISH  HISTORY,  1840 

TO  1850.     By  the  Hon.  Sir  Charles  Gatan  Duffy,  K.  C.  M.  G.     Svo. 

Cloth,  $3.00;  cheap  edition,  $1.50. 

"  Ably  written,  by  one  who  has  since  had  large  and  successful  experience  in 
the  British  colonies  "in  the  South  Pacific. " — Br.  C.  K.  Adams'' s  Manual  qf  His- 
torical Literature. 


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CAMEOS  FROM  ENGLISH  HISTORY.  By  Charlotte  M. 
YoNGE.     12mo.     Cloth,  $1.00. 

THREE  CENTURIES  OF  ENGLISH  LITERATURE.     By 

C.  D.  YoxGE.     Vlmo.     Cloth,  §'2.00. 

HISTORY  OF  THE  UNITED  STATES  OF  AMERICA, 
FROM  THE  DISCOVERY  OF  THE  CONTINENT  TO  THE  ES- 
TABLISHMENT OF  THE  CONSTITUTION  IN  1Y89.  By  George 
Bancroft.  The  author's  last  revision.  Complete  in  six  volumes  8vo. 
Price  in  sets:  blue  cloth,  gilt  top,  uncut  edge,  $15.00;  brown  cloth, 
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Tho  Fix  volumes  of  tills  new  and  fully  revised  edition  of  Bancroft's  "Ilistory 
of  the  Uuited  Sl:ites,"  now  complete,  comprise  tlie  twelve  volumes  of  the 
orifriiial  octavo  edition,  includina:  the  "History  of  the  Formation  of  tho  Consti- 
tution "  la*;!  published,  and  are  issufd  at  just  half  the  price.  Volume  VI  con- 
tains a  new  portrait  of  Bancroft  engraved  ou  steel. 

HISTORY  OF  THE  FORMATION  OF  THE  CONSTITU- 
TION OF  THE  UNITED  STATES.  By  George  Bancroft. 
1  vol.     8vo.     Cloth,  $2.50. 

This  volume  includes  the  orisinal  two-volume  edition  of  the  work,  with  an 
Appenriix,  containing  tho  Constitution  and  Amendments.  It,  is  designed  for 
constitutional  students,  and  is  sold  separately  from  the  other  volumes  of  Ban- 
croft's History. 

HISTORY     OF     THE     PEOPLE      OF     THE      UNITED 

STATES,  FROM  THE  REVOLUTION  TO  THE  CIVIL  WAR, 

By  John  B.  McMasteh.     6  vols.     8vo.     Vols.  I  and  II  now  ready. 

Cloth,  $2.50  each. 

Scope  or  the  Work. — In  the  course  of  this  narrative  much  is  written  of 
wars,  conspiracies,  and  reboUione:  of  Presidents,  of  Congresses,  of  embassies, 
of  treaties,  of  the  ambition  of  political  leaders,  and  of  the  rise  of  great  parties 
in  the  nation.  Yet  the  history  of  tho  people  is  the  chief  theme.  At  every  statre 
of  the  splendid  progress  which  separates  Ihe  America  of  Washington  and  Adams 
from  the  America  in  which  we  live,  it  hiis  been  the  author's  purpose  to  describe 
the  dress,  the  occupations,  the  amusements,  the  literary  canons  of  the  times  ;  to 
note  the  change  of  manners  and  morals;  to  trace  the  growth  of  that  humane 
spirit  which  abolished  punishment  for  debt,  and  reformed  the  discipline  of . 
prisons  and  of  jails  ;  to  recount  the  manifold  improvements  which,  in  a  thonsnnd 
ways,  have  m.ultiplied  the  conveniences  of  life  and  ministered  to  the  happiness 
of  bur  race;  to  describe  the  rise  and  progress  of  that  long  series  of  mechanical 
inventions  and  discoveries  which  is  now  the  admiration  of  the  world,  and  our 
just  pride  and  boast:  to  tell  how,  under  the  benign  influence  of  liberty  and 
peace,  there  sprnng  up,  in  the  course  of  a  single  century,  a  prosperity  un- 
paralleled in  tht;  annals  of  human  aflfairs. 


New  York:  D.  APPLETON  &  CO.,  1,  S,  &  5  Bond  Street. 


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